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Checkers vs Woolies over the last decade

The two businesses are vastly different (and bigger) than they were in 2011 …
So far 42 of a planned 80 Checkers Fresh X stores, which deliver a promise of ‘fresh food theatre’, have been opened. Image: Supplied

The battle between Checkers and Woolworths Food for higher-income shoppers has been fierce in recent years.

Checkers announced its decisive entry into the convenience food market in early 2017 after an aggressive push to get ready-meal type products onto its shelves in 2016. For years before that, it had steadily refined its store estate and pricing proposition to ensure sufficient segmentation between the Checkers and Shoprite brands.

A decade ago, the landscape looked very different.

Woolworths was in the midst of converting its local franchise stores to corporate-owned ones as it needed to own these to simplify the offer to its customers and entrench its loyalty programme (and ensure it controlled the margin).

Read:

It hadn’t even launched its larger food stores, described rather quaintly at the time by then new CEO Ian Moir as a “superwoolies”.

Its food business in the year to end-June 2011 reported turnover of R13.5 billion from 323 food stores, comprising 150 standalone stores and 173 food departments within larger stores. This excluded its 43 sites at Engen

At that time, Shoprite Holdings did not disclose the performance of Checkers separately, but it had 158 Checkers stores across the country and 26 Checkers Hyper stores (compared with 409 Shoprite stores and 223 U Save outlets).

Total turnover for its local supermarkets in the year to end-June 2011 was R57.2 billion. Assuming that the turnover contribution from Checkers and Checkers Hyper was nowhere near the levels of now (40%), it would’ve likely been around R17 billion to R18 billion for that year.

At that stage, the Checkers and Checkers Hyper business would’ve been no more than a third larger than Woolworths Food. Of course, this is a slightly unfair comparison as there is a certain amount of general merchandise sales in the Checkers and Checkers Hyper figure (perhaps R1 billion to R2 billion). The core food business may have been about 20% larger than Woolies Food in 2011.

Checkers today

Fast-forward a decade, and Checkers (and Checkers Hyper) is now the star of the show for Shoprite Holdings.

Turnover for the unit was R53.8 billion in the 53 weeks to July 4 – that’s almost exactly triple the estimated number in 2011.

In this last financial year, turnover was up 10.9% – significantly faster than the rate of growth in Shoprite and its Liquorshop segments. In the last financial year, Checkers comprised 40% of the group’s South African supermarket turnover.

The group says this higher-income focused segment grew at almost double the rate of the rest of the South African supermarket market in the six months between July and December.

Read: Double-digit growth for Shoprite’s upper-market Checkers chain

For the first six months of this year, the segment grew at more than one-and-a-half times the rate of the rest of the market.

Its strategy of aggressively competing with Woolworths is delivering.

By the end of June, it had 268 Checkers stores in South Africa (inclusive of 38 Checkers Hyper stores). That means it has added 72 supermarkets in the last decade, equating to around seven (net) new stores a year (plus 10 new Hyper stores across the decade).

These seem relatively modest numbers, but the group has expanded the number of Checkers stores by close to half (46%) in 10 years.

It has opened 42 Checkers Fresh X stores which deliver a promise of “fresh food theatre” of a targeted 80.

Read: Checkers FreshX to compete with Woolworths

The group says private labels are 18% of sales in its “RSA supermarkets”; that number is surely higher in the Checkers business, with its focus on fresh and convenience. It says it has gained R204 million in its share of “fresh” (convenience) in the last 12 months.

The launch of its Checkers Xtra Savings loyalty programme has been a success and has helped the group defend its pricing proposition, particularly against rival Pick n Pay (with Smart Shopper).

Arguably, it has been most successful with its launch of the on-demand Checkers Sixty60 delivery service in late 2019.

At the end of June, Sixty60 was live at 233 stores (not far off its total footprint). This service allows Checkers to compete in the convenience space, which its footprint has not historically really allowed it to do (think smaller neighbourhood-focused Woolies Food stores versus traditional Checkers supermarkets).

Read:

Yes, it continues to open stores in more areas, allowing it to be closer to communities, but it has not really ventured into the smaller-format, strictly-convenience focused store. Sixty60, with a subset of products (17 000 of the over 25 000 that a typical Checkers supermarket stocks), helps it bridge that gap.

June 2011 June 2021 Change
Checkers stores 184 268 46%
Woolies Food stores 323 348 8%
– of which standalone Food stores 150 194 29%
Checkers turnover R18 billion* R53.8 billion 199%
Woolies Food turnover R13.5 billion R38.3 billion 184%

* Estimate

Woolies today

By contrast, Woolworths Food is now a R38.3 billion a year business – almost triple the size it was in 2011.

By the end of June, it had 348 stores in South Africa (excluding its 81 Engen sites). Of this base of 348, 194 are standalone food stores – a 29% increase from a decade ago. These are typically more convenience focused (aside from the large Market standalone stores in certain nodes).

The number of full-line Woolies stores (fashion, beauty, home and food) has actually declined (by 11%) over the past decade.

This makes overall food store growth seem more muted than it has been.

Read: Woolies is cutting space by 11% to turn around ailing clothing business

Its food stores (and food departments within larger stores) occupy 254 000m2 of space (vs 157 000m2), which is an increase of around 60% from 2011.

Woolworths, Woolworths Food, Woolies, Checkers vs Woolies

Woolworths The Market food stores are larger in format and located in specific nodes such as Benmore Centre in Sandton. Image: Moneyweb

This tells a far better story of the scale of the growth of its food business since 2011. Even in full-line stores (think Sandton City, for example), food has taken a greater share of space.

While Moir will be remembered for the purchase of David Jones in Australia which has underdelivered, his strategy to build a big food business means the group is in far better shape today than it arguably may have been.

It contends it continues to take market share with growth of 3% above the rest of the market in the past year. Private label participation in Woolies is significantly higher than the rest of the market (easily north of 50%).

At its most recent results presentation, new CEO Roy Bagattini highlighted the opportunity that exists to leverage its “food formats in a ‘Food+Home’ concept”.

It intends to expand its leadership position in food and will continue to trial new formats. It was late to the game with on-demand delivery (Woolies Dash launched as a trial late last year) and the service has been somewhat underwhelming, particularly given ongoing teething issues.

But the group says online sales comprise 2.3% of total food sales (around R900 million a year). Is Checkers Sixty60 larger? Likely not just yet.

Because of the shift in the market (accelerated by Covid-19), where new habits of online, on-demand grocery shopping are being formed, this will be a major battleground for these two over the coming decade.

COMMENTS   27

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The stark levels of inequality in SA, is no more evident, than what we’re seeing here at Woolworths and Checkers!

While the majority live on R350 a month, a minority are gourging themselves on pre-packaged gourmet meals and imported fruits and vegetables.

This is why a basic income grant is urgently required, to address this inequality before its too late.

Look you not wrong, as well as havi g more consumer is a win for everyone but most dont understand that

Huge progress has been made to eradicate inequality! The connected cadres are driving around in Mercedes Benz’s, Range Rovers, Porches and even Bentleys. Not even Hendrik Verwoerd in all his stubbornness ever drove around in cars like that or lived in a R240m house like Nkandla.

@jnrb absolutely spot on

You cannot but notice the fancy expensive cars in the parking lots at malls and more specifically who emerges from them?

Ever noticed those same people giving a car guard a gratuity fee, even at traffic lights in areas where minorities live where the unemployed beg? I have yet to see them beg for food and money in township intersections

Another interesting statistic are the residents within security estates..I know for a fact that only 40% of minorities live in the upmarket one in my city..Even if i inherited a wine farm, money from my great grandfather, grandfather and father, i still cannot afford the lifestyle that our “comrades” enjoy

Which other country in the world do Politicians earn more than their peers in the private sector? It’s about self enrichment, not about Mandela’s dream of a non racial thriving economy

Telling, isn’t it?

To understand where the “persistent inequality” started, go back to 1652 when the Europeans brought with them mathematics, trigonometry, a calendar for both weeks and months to use as a planning tool, a knowledge of physics and a standard measurement system, a system of writing for planning and record-keeping, paper, pens, tools for construction etc of which the locals had NO equivalent. In fact, they haven’t even discovered the wheel in any applied format. This inequality started a long time ago.

Fact, Government has nothing to give for free, Government has to “steal” from those who pay taxes, before Government can “give” grants including R 350.00. Antagonising those who are forced to handover their hard earned money for little or no appreciation is less than helpful

Please do not feed the troll.

I lay the blame for inequality squarely at the door of the “beloved” ruling party!

Had it not been for greed, State Capture, BEE, and the looting of no less than two GDP’s, inequality as you so eloquently put it would have been much different

Your underlying message yet again is that the masses suffer at the behest of the minorities ie whites

Nothing is more further removed from the truth than exactly that train of thought and narrative perpetrated by the ANC and EFF, therefore the push for RET

Spare a thought for the 5% who carry the 50million, same who’s taxes pay the grants, and employ millions of underprivileged in their businesses and homes

The same folk who cannot find work as a result of BEE and so called transformation. They became entrepreneurs, who in turn keep the wheel rolling and employ many thousands amongst them

As it stands, the more Checkers and Woolworths grow, the more people they employ..and make no mistake, the minority group does not share in these spoils

So quit ranting about inequality when 300 000 people are employed between these retailers including Pick n Pay

If the ANC and EFF continue with their narrative against minorities, they will kill the goose that lays the golden egg (read Zimbabwe)

I would love to hear Politicians speak about economic growth, irrespective of who is involved..

But no, it’s all about cadre deployment and who benefits, hence the reason the EFF drools at the mouth to be able to beat the ANC at the polls (read VBS)

Why did Clover relocate to Natal and leave many ex employees destitute..?

There was nothing in it for the Politicians to upgrade services in Lichtenburg, therefore nothing was done!

Do they care about inequality? Isn’t the North West a strong hold for the red berets? Where were they?

That my dear EFF Commissar tells the story of inequality in this country and why nothing will change

Please ignore this idiot guys. He feeds on this kind of thing.He is one of those 30% pass rate bottom feeder kids with limited brain capacity and no work.

A great relief : at least I won’t come across you in Woolies !!

The stark levels of inequality in SA, is no more evident, than what we’re seeing here at Woolworths and Checkers!

While the majority live on R350 a month, a minority are gourging themselves on pre-packaged gourmet meals and imported fruits and vegetables.

This is why a basic income grant is urgently required, to address this inequality before its too late.

My guess is you are using multiple pseudonym‘s to irritate the living daylights out of educated people

I’ve told you before, engage brain before you accelerate finger

Your trolling and provocative posts are not worthy of a debate

Be proud of me, I spent time drinking with my friends yesterday and not once did I bring up politics. Like y’all, not once did I say ‘I just think that, in a country like ours…

@EFF. I have the right store for you: CHOPPIES!

Correct!. We are unequal .I work ,I think ,I take responsibility ,I am not corrupt,I teach my children and i don’t have illegitimate children roaming around without their parents and that is why i can buy proper food for all of us

Well if the Government under Zuma had not stolen, sorry affirmatively shopped, Billions we could have doubled grants long ago.

This is more a reflection on the failure of the black government to create jobs.
The solution is not more hand-outs; which creates dependency and greater inferiority complexes.

Great article. Good comparison. Thank you.

I’m too much of a cheapie to shop at Woolworths but what I admire is the spaciousness of their stores. Checkers stores simply have too much stuff.

Checkers and Food Lovers Market at the Whale Coast Mall (Hermanus) are both great. Even our EFF friend can spend his VBS heist money there…

It is an absolute pleasure to shop at my local Checkers Fresh X store. They have all those nice little things like cheeses which are hard to find. My local Woolworths are often out of stock.

There a few section that Checkers can improve on and be more competitive. I shop at Checkers for most of my shopping.

However there Liqour outlets are expensive so I shop at Makro which include my Cigarettes.

Recently I have started purchasing my meat from Bluff Meat in Queensburgh Durban due to variety and price.

Fruit and Vegetables I have moved away from Checkers to Housewives Market mainly due to price.

Before with E Bucks rewards from FNB now pathetic which partner with Checkers.

I am Retired, no Bond, no Overdraft eg I am stuck on Level 2 rewards.

So Checkers may be ahead on Market share they need to get more competitive as per above to draw me back.

WJS

Comparing chalk and cheese

I must say that I am pleasantly surprised to see that Foodlovers at Willowbridge is doing a comprehensive revamp and upgrade of their store.

That should be somewhat of an embarrassment to Checkers as their neighbours at what should be one of their more upmarket stores given that many of Shoprite’s executives and senior managers live in the area.

I went to Woolies Foodstore ClearWater on Saturday….just browsing. On the tinned fish shelve, all Lucky Star and Glenryck pilchards were sold out while the Woolies brand still fully stocked. I didn’t looked at the price but this observation just came up from memory when I read the article.

Woolies, not Woolworths manje I am familiar with these upper class things. Me and Woolworths have a personal relationship so much that we are now beyond first name basis. There where I live in Hyde Park and SABC3 we say it is Woolies.

For my locally accessible stores the food quality and range in Checkers is ok – approaching Woolworths in some respects but the shopping experience is a million miles apart. Also, I would say Checkers is cheaper for popping in and getting a few things but Woolworths is cheaper for a major shop since Woolworths has really heavy volume discounts on a lot of their food items. These punish those stopping in for a few luxuries but reward those doing more of a major shop.

End of comments.

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