Checkers stealing Woolworths Food customers

Checkers is gaining market share from Woolworths Food and Pick n Pay through its superior offerings and Sixty60 grocery service.

Checkers is a subsidiary of JSE-listed Shoprite, the largest African food retailer with a market cap of R182 billion.

Shoprite’s latest annual report showed that it generated revenue of R241 billion from sales of merchandise. Checkers and Checkers Hyper generated R79.4 billion of these sales, representing 33% of Shoprite’s total sales.

According to Shoprite, Checkers is South Africa’s fastest-growing retailer in the premium food segment.

The company’s finances back up this claim. Checkers has been winning market share from Woolworths Food in the premium food segment.

Since 2019, Checkers’ market share has increased from 57% to 62%, while Woolworths Food’s market share has dropped from 43% to 38%.

Sixty60 drives part of Checkers’ success in the premium food segment. The grocery delivery app has gained strong adoption across South Africa.

It is available at over 500 locations, created over 9,000 jobs, and its sales have increased over tenfold since the first half of 2021.

The service is so successful that Shoprite has acquired Pingo Delivery, the logistics system behind its Checkers Sixty60 service.

Shoprite CEO Pieter Engelbrecht explained that relying on third-party operators could pose problems as Shoprite was expanding so fast.

“We need to have the entire value chain delivered at speed with continuous enhancements,” he said.

“Currently, we are growing at such a pace that it is hard to keep up with us in terms of third-party vendors that maybe do not have the same balance sheet.”

The chart below shows Checkers and Woolworths Food’s market share, clearly illustrating the move towards Checkers.

It is not only Woolworths Food that is struggling to contain the Checkers juggernaut. Pick n Pay has felt even more pain.

After years of strategic missteps, Pick n Pay has landed in serious financial problems. This year, the retailer became technically insolvent, forcing it to launch a rights offer and list its Boxer business to raise money.

In October this year, Pick n Pay announced that it had closed 24 supermarkets, including 10 corporate stores and 14 franchise stores, over a 26-week period.

Closing Pick n Pay stores and converting others to Boxer outlets formed part of its strategy to cut costs and do away with loss-making stores.

Pick n Pay stores have experienced poor growth over the past 12 months. Their turnover decreased by 0.33% in H2 2024 and by 0.34% in the latest H1 2025 interim results.

Pick n Pay’s poor performance over the past few years opened to the door for Checkers to grab market share from the retailer.

Checkers’ sales have grown to the point where its annual turnover surpassed that of Pick n Pay Stores.

This is the first time it has happened, and it showed that Checkers was rocking while Pick n Pay experienced challenges.

One frustrating thing for investors is that Shoprite does not share much information about Checkers’ financial performance outside of revenue.

Shoprite has not shared information on Checkers’ income statement or balance sheet figures, so it is not possible to analyse Checkers’ performance in isolation.

Given that Shoprite is very profitable relative to its industry competitors, one could assume this is the case for Checkers. However, it is not certain.

Shoprite did indicate that it received dividends of R2.5 billion in 2023 and R2.6 billion in 2024 from Checkers, but this still does not guarantee Checkers’ profitability.

A group as large as Shoprite has many different segments, and not reporting detailed finances on the group’s various segments makes analysing the business difficult.

A segment like Checkers, which delivers such growth and contributes much to Shoprite’s turnover, draws considerable public and investment interest.

It is also important for investors to know which parts of the business are performing well and which aren’t.