The race for reach is on, according to Shoprite Group CEO Pieter Engelbrecht.
"This means the winners will be the retailers that reach the most customers via the most media and the largest number of distribution models, and we have already illustrated that we want to go into precision retail," he told Fin24 on Tuesday afternoon.
Shoprite Group's market research indicates that Shoprite competes well for the position of lowest priced retailer, says Engelbrecht. At the same time, consumers understand the value proposition offered by the group's Checkers stores, he adds.
"We are aiming for the higher LSM market with our Checkers offering, since this market segment is more resilient in tough economic times," Engelbrecht told Fin24.
"We have gained market share, especially in fresh and convenience foods. We are looking at some new Checkers formats."
Shoprite profit takes a knock as strikes, poor economy hit sales
The performance of the SA operations was, however, not enough to neutralise the negative impact of results of operations in the rest of Africa, mostly due to currency devaluations and certain aspects, like rentals, maize and fuel, being priced in dollar terms.
"We have been operating in the rest of Africa for 24 years now... We have invested in infrastructure, supply chains and agricultural programmes. So, I think the value of our investment in the rest of the continent is still very valid," said Engelbrecht.
"There is no need for us to run away from our investment in the rest of Africa, but that does not mean we must stay at all cost. We have exited from countries like Egypt and more recently Mauritius. We re-evaluate things all the time, but on a country-by-country basis. We have an absolute clamp down on costs and make sure we are not spending unnecessarily."
At the same time, to keep goods affordable for already constrained consumers, the group's selling price inflation for the financial year was at 1.2%, similar to the year before. At year-end, the number of products priced cheaper than the previous year was to 9 679.
Shoprite Group's share price closed 9.25% down at R126.86.