From A Supermarket To Mega Stores: The History of Shoprite

From A Supermarket To Mega Stores: The History of Shoprite

Shoprite Holdings, is Nigeria and Africa’s largest retailer. The company has been on aggressive expansion across several cities of Nigeria, but not many Nigerians know the source and history of Shoprite.

On its corporate website the company took its time to provided an indepth history of how it started from a supermarket in Cape Town , South Africa to becoming one of Africa’s largest companies.

The Shoprite Group of Companies started from small beginnings in 1979 with the purchase of a chain of 8 Cape-based supermarkets for R1 million. The next 37 years were marked by various acquisitions and innovative expansion strategies that brought it to the R113.69 billion business that Shoprite is today.

In 1983 the Group opened its first branch outside the Western Cape – in Hartswater in the Northern Cape. At the end of that year, Shoprite opened its 21st outlet in Worcester and celebrated an increase in turnover of almost 600% over the four years of its existence. A year later Shoprite sped up its growth by buying six food stores from Ackermans.

In 1986 the Group expanded to the Free State, opening a store in Bloemfontein. Shoprite was listed on the JSE Securities Exchange South Africa with a market capitalisation of R29 million. It then owned 33 outlets. Two years later Shoprite ventured over the Vaal River and opened two stores in the former Transvaal province, the first of which is situated in Polokwane (Pietersburg).

In 1990 Shoprite opened in Namibia. Within four years of listing on the JSE, Shoprite increased its outlets four-fold by acquiring Grand Bazaars.

And the next year in 1991; it grew almost six-fold with the acquisition of the national Checkers chain of supermarkets. Overnight Shoprite trebled in size to 241 outlets with a staff of 22 600.

While consolidating that new business, which for the first time gave Shoprite country-wide representation, expansion plans for the rest of the continent were put into action and by 1995 the Group was able to open its first store in Central Africa, Shoprite Lusaka in Zambia.

That same year Shoprite utilised a golden opportunity to increase its distribution substantially by acquiring the central buying organisation then known as Sentra, which acted as a buying group for 550 owner-manager supermarket members. Shoprite thus entered into the franchising field, enabling it to compete in smaller markets where the emphasis is on convenience.

In 1996 the Group launched the Woman of the Year Award to mark National Women’s Day. It became South Africa’s premier accolade for achievement by women and seeks to focus attention on issues that are of importance to the women of South Africa.

In 1997 Shoprite acquired the ailing OK Bazaars Group from SAB in the now legendary “R1 deal”. This strategic expansion move added 157 super- and hyper sized supermarkets and 146 Furniture stores to the Group. In the same year Chief Executive Whitey Basson earned the Western Cape Business Man of the Year Award as acknowledgement for his pioneering work in supermarket retailing. The Group also invested in a development in Mozambique and opened its first store in Maputo. All the OK stores in Swaziland were converted into Shoprite stores and a year later the same process was followed in Botswana.

Shoprite Holdings was selected by the Corporate Research Foundation as one of the 49 Best Companies To Work For and one of the 50 Most Promising Companies in South Africa for 1998. Also in 1998, Shoprite Holdings was ranked number 8 by Turnover in Financial Mail’s Top 100 Companies listing. The Group was also ranked third in the category of Total Assets in Finance Week’s survey of the Top 200 Companies in the JSE’s Stores Sector.

In 1999 Shoprite Holdings was ranked 43rd in the Sunday Times Business survey of Top Companies by Price Earnings Ratio. The Group also maintained its position as number 8 in Financial Mail’s Top 100 Companies listing by Turnover.

In 2000 the Group opened its first supermarkets in Zimbabwe and Uganda. The Corporate Research Foundation again selected Shoprite Holdings as one of South Africa’s Most Promising Companies. The Group was the only supermarket retailer to achieve this distinction. In November 2000 the company was identified by Financial Mail and Human Capital Corporation (Deloitte & Touche) as one of the 40 Best Companies to work for. Also in 2000, the Sunday Times Business Times ranked Shoprite Holdings as number 51 in its listing of the Top 100 Companies over the previous 5 years.

A year later in 2001 the first of seven supermarkets opened in Egypt, taking Shoprite into the North African market. The Group also started operating in Malawi and Lesotho.

In this year F&T Finance Week measured the growth ratios of top companies and Shoprite was the top performer on earnings per share over 10 years. In Financial Mail’s Top Company Survey of 2001 Shoprite Holdings was placed 58th in the ranking by market capitalisation of the Top 150 Market Leaders. In the retail sector the company ranked 3rd by market capitalisation. Shoprite was placed 4th in the survey on staff numbers and productivity.

October 2002 saw the acquisition of the French-owned Champion supermarket group in Madagascar in an agreement that enabled Shoprite to take control of five supermarkets now trading under the Shoprite banner, and one distribution centre.

The 2002 Markinor-Sunday Times Top Brands Survey scored Shoprite Checkers in 4th place in the Most Loved Every-Day South African Brand category and 5th place in the Top 10 Most Admired Companies category. The Checkers brand shared the 1st place on a brand relationship score in the Grocery Store Sector, Shoprite was ranked 2nd, Shoprite Checkers 3rd and the OK brand took 4th place.

The November 2002 opening of the Group’s first outlet in Mauritius – the first Shoprite Hyper beyond South African borders – made Group history by achieving the highest turnover ever recorded for a single opening day of trade.

Shoprite ended the year 2002 on a high note with the acquisition of Score Supermarkets’ Tanzanian operation – three supermarkets and a small distribution centre – which became effective on 31 December.

After listing on the Namibian Stock Exchange towards the end of 2002, the first highlight of the year 2003 was the Company’s listing of 2,7 million shares on the Lusaka Stock Exchange (LuSE) at an initial listing price of 4,200 Kwacha per share. The Group’s main listing remains on the Johannesburg Stock Exchange. In the same year the Markinor-Sunday Times Top Brands survey identified Shoprite and Checkers, individually and combined, as South Africa’s most trusted supermarket. The Group also opened its first stores in Ghana and Angola and made a start with the rollout of the highly successful new Usave format.

The 2003 Markinor-Sunday Times Top Brands Survey identified Shoprite and Checkers, individually and combined, as South Africa’s Most Trusted Supermarket. In a measurement of all brands, Shoprite scored fifth place in the category for Most Admired Companies – the highest of all retailers.

In 2004 Shoprite started trading as a wholesale operation in India and franchised its first Shoprite Hyper in this country, in a modern shopping centre in Mumbai. In the 2004 Markinor-Sunday Times Top Brands survey, Shoprite Checkers is listed as the fifth Most Admired Company in South Africa..

In 2005 saw the Group acquiring both Foodworld, with 13 stores, and Computicket, as well as opening the first Shoprite Liquor Shop. Furthermore, in December of 2005 Shoprite entered Nigeria, the world’s fifth largest oil producer, when it opened a supermarket in a new shopping centre in Lagos.

Also in 2005 , the Shoprite brand scores second place in the Top Grocery and Convenience Store category and Checkers fourth place, in the annual Markinor-Sunday Times Top Brands survey. Shoprite is also rated amongst the Top 10 for Community Upliftment. Hungry Lion is recognised for creating huge brand awareness in only a few years by entering the Top 10 in the Fast-food Top Brands sector.

Shoprite was ranked 132nd on the list of the world’s top 250 retailers in 2006 according to the 2008 Global Powers of Retail report from Deloitte Touche Tohmatsu, in conjunction with STORES magazine. Only four South African retailers made it on to the list.

The 2006 Markinor-Sunday Times Top Brands survey rated Shoprite the number one food retail brand in the country. Shoprite also achieved the highest score from customers in non-metro areas where the brand has established the largest footprint in its forty years of existence. Moreover, Shoprite Checkers is listed under the top six good corporate citizens in South Africa in a national survey by research company Plus 94 on the corporate social responsibility contributions made by companies. During 2006 the Group divested from Egypt due to ongoing restrictions on retailing. Its seven stores were closed, resulting in a loss of R19,9 million.

The 2007 Markinor-Sunday Times Top Brands survey rated Shoprite amongst the Top 10 companies for Community Upliftment. Hungry Lion was also rated amongst the Top 10 Fast Food and Restaurant Chains.

2008 saw the Shoprite Group added to the JSE Top-40 Index of blue-chips, while the Shoprite brand was voted South Africa’s number one supermarket in the annual Ipsos Markinor Top Brands business-to-consumer survey.

In the 2008 Business Times Top 100 Companies Survey – a survey that acknowledges those listed companies that have earned the most wealth for their shareholders – Shoprite Holdings was ranked in the top 20 companies in both the over 5 year and over 1 year measurements of return. When compared to the other 39 companies within the JSE Top-40 Index, the same survey placed Shoprite Holdings in an impressive 5th position.

Also in 2008, Shoprite was named the leading retailer in Africa and Middle East out of the regions’ 30 best grocery businesses in a report by Planet Retail titled: Africa and Middle East Rankings: All set to make the difference.

In January of 2009 Shoprite Holdings Ltd., South Africa’s largest grocery chain by market value, was added to Merrill Lynch & Co.’s list of most preferred stocks, with the bank citing “excellent growth” in sub-Saharan Africa. The Shoprite brand was also again voted SA’s No. 1 supermarket in the 2009 Sunday Times Top Brand Survey. During this year the company acquired Transfarm, a pharmaceutical wholesale company.

In the Deloitte report – Emerging from the downturn: Global Powers of Retail 2010 – published in January 2010, Shoprite Holdings Ltd was listed as the largest retailer in South Africa and 130th biggest retailer globally. This report identified the 250 largest retailers in the world based on publicly available data for the companies’ 2008 fiscal year (encompassing fiscal years ended through June 2009).

In 2010 Shoprite made the decision to disinvest from India and focus on investment opportunities in the commodity rich countries of Western Africa in line with its long term growth plan.

For the third year in a row, the Shoprite brand was voted SA’s No. 1 supermarket in the 2010 Sunday Times Top Brand Survey. Another feather in Shoprite Group’s cap was when the Shoprite supermarket brand won a first place in the 2010 annual The Times and Sowetan Retail Awards as top supermarket for overall customer experience. The Shoprite brand also won in the categories of monthly grocery shopping, weekly grocery shopping and more-than-once-weekly grocery shopping and took second place in the Retail Grand Prix category.

In the Sunday Times’ 2010 survey of Top Companies (.pdf) listed on the JSE the Shoprite Group ranked third for its share price and dividend performance over the past five years and was the top-performing retailer, achieving compound annual growth of 46.35% over the period. An investment in Shoprite of R10 000 in 2005 would have yielded R67 126 in 2010.

2010 also saw Shoprite Holdings Ltd receive top honours in the Retail category of the 2010 Top 500 Companies Awards. The Awards, presented in association with Top500: South Africa’s Best Managed Companies publication, bring together the first in sector winners from 100 leading business sectors to celebrate the best in South African Business. In the 13th annual edition of the Global Powers of Retail 2010 report by Deloitte, Shoprite Holdings Ltd was listed as the largest retailer in South Africa and 130th biggest retailer globally.

In March 2011 it was announced that the Shoprite Group has entered into an agreement with Metcash Trading Africa (Pty) Ltd in terms of which the franchise division of Metcash is to be sold to Shoprite Checkers. The Metcash franchise division includes franchise arrangements with franchisees operating retail stores under registered trademark names such as Friendly, Seven Eleven and Price Club Discount Supermarket. The store formats varies from convenience stores to supermarkets and discount supermarkets and are situated throughout the nine provinces of South Africa. The sale, which is subject to Competition Authority approval, will see the integration of members of the Metcash division in Shoprite’s OK Franchise Division.

The Global Powers of Retailing list, that ranks 250 retailers from all over the world according to total revenue, showed Shoprite Holdings rocketing from a global ranking of 130 in the previous year into the 95th position in 2011 – a truly impressive movement on the global retailing stage.

The Markinor Top Brands Survey 2011 found the Shoprite brand to be the No 1 Supermarket for the 5th year running, while in the Top Retail Brands Section of the same survey Shoprite claimed first place in all five grocery categories. The Markinor Survey furthermore identified Shorite as the 6th overall favourite brand, with a 3rd most valued brand in terms of community upliftment in South Africa.

The Group started 2012 on a high note by moving up another three places on the Global Powers of Retailing list to a global ranking of 92nd, while solidly maintaining its 1st place ranking in terms of Africa and the Middle East.

On 19 April 2012, Shoprite became the first South African retailer to enter the Democratic Republic of Congo (DRC) as it opened the doors of a new world-class supermarket in Gombe, Kinshasa to an eagerly awaiting public.

Financial Mail’s Top Companies ranks Shoprite Holdings as 10th in the 2012 SA Giants list, indicating that “Shoprite’s results keep on defying gravity”.

In South Africa, Shoprite was rated sixth overall in the 2012 Sunday Times Top 100 Companies awards, with a compounded annual growth of 42.9% in share price value over the previous five years.

The Group’s Shoprite brand was rated as the most valuable retail brand in South Africa by Brand Finance with an estimated value of R8,9 billion.

According to both the Sunday Times Top Brands awards and The Times/Sowetan Retail Awards in 2012, South Africans rated the Shoprite Brand as the Number 1 supermarket and Number 1 in all five grocery categories including overall customer experience.

Deloitte’s Global Powers of Retailing 2013, names The Shoprite Group as the largest retailer in Africa and 93rd biggest in the world. Financial Mail’s Top Companies ranks Shoprite Holdings as 11th in the 2013 SA Giants list.

As at June 2013 about 24.574 million South Africans – 70% of the total adult population – shopped at one of the Group’s supermarket outlets and it employed close on 112 000 employees having created a record 9 201 job opportunities during the year.

In The Times / Sowetan Retail Awards 2013, the Shoprite supermarket maintained its position as the top retailer in South Africa, winning the Overall Grand Prix for the fifth consecutive year. Shoprite also claimed the award for providing the best Overall Customer Experience in the Supermarket & Hypermarket category and took third position in the category for Household Appliances.  In the specialist furniture store category, House & Home, previously in 9th position, took a giant leap into third spot in 2013.  MediRite  Pharmacies were ranked third in the Health and Beauty category and Shoprite LiquorShops third in the Liquor category.

Deloitte’s Global Powers of Retailing 2014 ranks The Shoprite Group as the 94th largest retailer in the world.  Shoprite Holdings won the Top Retail Company title in the Financial Mail’s Top Companies 2014 and is ranked 11th overall in the Top Companies 2014 listing.  The Sunday Times Top Brands Awards 2014 named Shoprite as the top grocery store in South Africa and placed Shoprite fourth in the Grand Prix category for Overall Favourite Brands.  Shoprite also ranked third in both the Social Investment and Green Awards categories.

The Shoprite Group was once again awarded for excellence and popularity amongst consumers in the 2014 The Times / Sowetan Retail Awards.  Its flagship brand, Shoprite, took first place in the Grand Prix category and was voted the number one Grocery Store. The chain also came second in the Household Appliance category, up one place from 2013 and third in the Specialist Entertainment category.  MediRite moved into second place (in 2013 it was placed third) in the Specialist Pharmaceutical Outlets category, with LiquorShop remaining in third place in the Liquor Stores category. House & Home also retained the third spot in the Specialist Furniture Stores category.

According to the Deloitte Global Powers of Retailing survey for 2015, Shoprite Holdings was named the number one retailer in Africa and the Middle East.   According to the report, the Group is classed the 107th largest retailer in the world, 41 places ahead of its nearest rival.  The Financial Mail’s Top Companies 2015 placed Shoprite Holdings as the Top Retail Company in 2015 and ranked it 14th in the 2015 SA Giants list.

The Shoprite Group was again honoured in the 2015 The Times Sowetan Retail Awards with its supermarket chain, Shoprite, achieving the Grand Prix award as top retailer overall for the seventh consecutive year, voted the number on Grocery Store and placed third in the Specialist Entertainment category.  Several of the other brands in the Group also took top-ranking positions based on consumer feedback:  MediRite was placed third in the Specialist Pharmaceutical Outlets category; Shoprite LiquorShop remains third in the Liquor Stores category with Checkers LiquorShop moving into ninth position; and House & Home was ranked third in both the Household Appliances and Bed Stores categories.

The Shoprite supermarket chain also received a variety of other awards during 2015.  These include the number one supermarket in the Sunday Times Top Brands Survey, the number one food retailer in the TGI Icon Brands Awards and the Ask Afrika 2015/2016 Youth Brands Survey respectively, and for the first time was selected as top toy retailer in the TGI Icon Brands Awards.

As at June 2016 some 76% of South Africa’s total adult population shops at one of the Group’s supermarket brands.The Shoprite Group employs almost 138000 people of whom 21000 work outside South Africa.  During the financial year, the group had a record 1 billion transactions in a single year (equal to 95 transactions per second).

Shoprite was again the firm favourite amongst consumers, selected as the top grocery store in the 2016 Sunday Times Top Brands awards and placed second in the community upliftment and the green award categories.

The Shoprite Group of Companies, Africa’s largest food retailer, operates 1855 corporate and 359 franchise outlets in 15 countries across Africa and the Indian Ocean Islands, bringing the total number of stores in the Group to 2214.