Shoprite Defies Retail Trend with Massive Store Expansion While Competitors Close Doors

In a challenging retail environment where major players like Pick n Pay, SPAR, and Italtile are closing underperforming stores, the Shoprite Group is bucking the trend with a significant expansion strategy. Reporting its financial results for the 26 weeks ended December 2024 (HY25), Shoprite revealed a sharp increase in store openings, with 264 new stores launched across its segments in South Africa alone.

A Surge in Store Openings

Shoprite’s aggressive expansion includes 32 new Shoprite stores, 37 new Checkers stores, and 81 new Shoprite and Checkers Liquor stores. Although the group closed 16 stores over the same period, this still resulted in a net increase of 248 stores. Additionally, Shoprite has confirmed plans to open 122 new stores in the second half of its financial year, with a particular focus on its USave brand, which will see 43 new outlets.

Focus on Adjacent Businesses

Beyond its core grocery offerings, Shoprite is heavily investing in “adjacent businesses,” including clothing, baby, outdoor, and pet brands. CEO Peter Engelbrecht highlighted the success of Petshop Science, which has grown to 129 stores by March 2025, with sales increasing by 56.9% during the interim period.

“Whilst presently small in the Group context, our expansion into these categories is meaningful in the universe of everyday purchases for our customers and important in terms of the role they play in our ecosystem, which defines our roadmap for future growth,” Engelbrecht said.

Strategic Moves and Asset Disposals

Shoprite’s growth strategy also involves streamlining its operations. The group recently disposed of its OK Furniture and House & Home brands, removing 407 stores from its portfolio. Additionally, Shoprite is selling non-core assets, such as group-owned shopping malls and retail centres, as part of a sale and leaseback strategy. These moves have already yielded a small profit of R24 million, with more opportunities being explored.

Contrast with Competitors

Shoprite’s expansion stands in stark contrast to other major retailers. Pick n Pay, for instance, has been closing underperforming stores as part of a broader restructuring effort. In its trading update for the 45 weeks ended 5 January 2025, Pick n Pay reported the closure of 24 company-owned supermarkets and eight franchise stores.

Similarly, SPAR announced the closure of 13 underperforming stores in its South Rand Region, as noted in its 18-week update ended 31 January 2025. Italtile has also been forced to close or relocate stores in unsafe areas due to rising criminal activity.

Woolworths’ Moderate Growth

Woolworths, another key player in the South African retail sector, has shown moderate growth in its store network. The group opened 21 new Woolworths Fashion, Beauty, and Home stores in South Africa, bringing its total to 290 outlets. However, Woolworths Food saw five store closures, reducing its count to 360. The group forecasts opening 22 new outlets by June 2025 and is expanding its Absolute Pets brand under the Woolworths Food segment.

While the South African retail sector faces significant challenges, Shoprite’s aggressive expansion and strategic focus on adjacent businesses position it as a standout performer. With 264 new stores opened in HY25 and plans for further growth, Shoprite is defying the trend of store closures seen among its competitors. As the retail landscape continues to evolve, Shoprite’s innovative approach and commitment to growth offer a compelling case study in resilience and strategic foresight.

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