The battle for market share

Analysts struggle to call race between Shoprite and Pick n Pay

NEWS

I-Net Bridge - Jul 19th 2010, 00:00

The battle for market share between South Africa's retail giants Shoprite Holdings and Pick n Pay seems to be hotting up. 

The two retailers were last year embroiled in a war of words over who controlled the biggest share of the market.

Shoprite claimed its share accounted for 31.67% of the market.

However, Pick n Pay disputed this, saying it was the real market leader with 34.7%, a claim that was backed by research firm Nielsen.

Shoprite last week reported an impressive 13.6% boost in total turnover to R67.4-billion in the 53-week period to June.

Retail analysts also differ on who is the boss in this sector. One analyst said that although Pick n Pay did have considerable market share, it was definitely losing out to Shoprite because of the latter's volume growth.

"If you look at the formal retail market share of grocers in terms of a giant pie that's continuously growing, Shoprite has the bigger piece of the pie whereas Pick n Pay's slice is just not growing," he said.

He added that the remaining market share was taken up by Spar, Woolworths, spaza shops and independent and informal traders.

Another analyst disagreed, saying Pick n Pay had more market share.

"Shoprite's market share is growing, but Pick n Pay and its Boxer brand take up a larger percentage of overall market share," he said.

Others believe that Shoprite's focus on value offerings and the repositioning of its Checkers brand has given it an advantage over its rivals.

Shoprite's supermarkets in South Africa form the group's core operation and have increased sales by 14.6% during the period under review.

The group's OK furniture division performed well, growing turnover 16.7%, but the turnover of the 106 supermarkets the group operates outside South Africa declined 2.1% on a 53-week basis. The decline is attributed partly to the strengthening of the rand against currencies in countries where the group trades.

Shoprite is scheduled to publish its annual earnings next month and hopes this will prove its dominance of the market.