Africa has strong companies with innovation. (Photo: Freepik, Prostooleh)
Shoprite is the largest retailer in South Africa and also on the entire African continent. The importance of the company can be recognized by the shareholders. The South African state is 10 percent and the Norwegian state funds with a 1.3 percent of a shop. In addition, insiders hold around 20 percent of the shares.
Shrite is active with over 160,000 employees, thousands of branches and 32 distribution centers in 10 African countries. The company’s innovative strength is reminiscent of the most successful corporations in the western world. What makes Shoprite so interesting and successful?
Goal: cost leadership in food
Shoprite has a clear purpose. You want to provide the most cost -effective food for Africa for all income layers. For this reason, there are several brands that address different income classes.
While the main focus is on the food retail trade, the business model also includes the areas of pharmacy as well as financial and mobile phone services. The Shoprite group includes more than 20 brands, including Checkers Foods, Checkers Outdoor, Liquor Shop Checkers, Transharm and Usave.
Customer loyalty with loyalty program and Xtra Savings card
Another success factor is Shoprite’s loyalty program, which is the largest in South Africa with 31 million Xtra Savings customers. The program offers personalized offers and ensures that customers are bound in the long term. The Money Market account has also been available since 2024. With the XTRA Savings card introduced for this, customers can carry out all transactions such as transactions, cash withdrawals, purchases and money transfers free of charge.
Innovation in response to challenges
Due to economic challenges, supply chain problems and currency -related disadvantages, Shoprite 2018 and 2019 had to report a decline in profits. The market entry in Nigeria and Uganda turned out to be unsuccessful. In response to this, several measures were implemented, so that the profit doubled between 2021 and 2024. In 2021 Shoprite sold his assets in Nigeria and Uganda and further invested in innovation.
With the initiative “Shopritex” A new division was founded, which focuses exclusively on technological innovations. Shopritex uses modern technologies such as artificial intelligence and data analyzes to enable personalized offers and better inventory management. This also includes the development of tools for e-commerce to improve the online shopping experience.
Furthermore, the company has strongly invested in the optimization of supply chains and energy efficiency. An ERP system controls the distribution of the products from the suppliers via the distribution centers to the branches. Locations and trailers were equipped with solar and photovoltaic systems. Energy production could be increased by 150 percent within 2 years!
During the corona pandemic, the Sixty60 delivery service introduced. Customers should be able to order within 60 seconds and receive the delivery within 60 minutes, no matter which one Circumstances prevalence. The Sixty60 motorcycles also reached large on social media popularity. Growth could be increased by 83 percent within a year.
With Checkers rush Plant Shoprite to introduce cashless shops based on the example of Amazon Go.
Success factor: management
Shrepite vision is to be the most profitable African omnichannel retailer. In addition, the most attractive possibilities in growth markets should be developed and expanded in order to increase sales per customer in the long term.
Management is successful. The founder “Whitey” Basson bought the small shop chain consisting of only 8 branches in 1979. He succeeded in expansion with strategic acquisitions (Grand Bazaars, Checkers, Ok Bazaars) and the expansion to 1,500 branches. Shrite reached a market share of 34 percent until its retirement in 2016.
His successor Pieter Engelbrecht had already worked in the company for 20 years and was familiar with the strategy. Engelbrecht increased the number of branches to more than 3,000 by organic and inorganic growth within 10 years.
The strong leadership and long -term planning made it possible to establish stable relationships with suppliers, customers and partners. With close partnerships with suppliers, the company secured competitive prices at an early stage. The promotion of the employees in turn led to high satisfaction and a friendly, competent workforce. Low prices and excellent service thus ensured high customer satisfaction.
In addition, Shoprite strengthens customer loyalty through programs such as Xtra savings and that Money Market account. This successful mix of innovation, partnership, responsibility and communication represents the key to sustainable success and growth of shopping on the African market.
Conclusion: Africa has strong companies with innovation to offer
Shrite combines customer -oriented approaches, digital innovation, strategic expansion and product diversification in order to consolidate its management position in African retail. Despite recurring challenges, the company shows resilience and rapid adaptability.
With ongoing investments in digitization, sustainable growth and customer satisfaction, Shoprite is a remarkable company that would even make western success companies Costco or Walmart jealous.
Disclaimer:
No investment advice. No call to buy or sell securities.