Shoprite added a hefty R11bn to annual sales from in-house brands over the past three years. This has implications for established branded consumer goods makers such as Tiger Brands and AVI.
In the 2024 annual report released on Monday, Shoprite said its private label sales rose 12.8% this year, contributing 21.3% to its R200bn-plus supermarket sales, excluding liquor. Its private label portfolio evolved from 184 brands valued at R21bn to 169 brands worth R32.3bn three years ago.
This underlines a retail-sector shift. Private labels are now seen as high-quality, value-driven options, directly challenging Tiger Brands, AVI and RCL Foods, consumer goods stalwarts that have relied on the brand legacy of pantry stables such as Koo baked beans, Bakers biscuits and Bobtail dog food.
According to the NIQ State of the Retail Nation analysis for quarter three 2023, private label products have become vital to SA’s retail sector, which generated annual sales of R631bn. In 2023, these products accounted for more than R89bn or 24.3% of total basket value sales.
Coming annual figures for financial 2024 year are expected to be even higher as consumer preferences keep evolving. In quarter two 2024, consumer spend on fast-moving consumer goods (FMCG) reached R181bn, up 4.8% year on year, according to the NIQ Retail Spend Barometer. Growth rates of FMCG categories fell, but appetite for private labels remains strong, reflecting consumer desires for affordability and quality in an unstable economy.
Shoprite said it expanded its private label range, introducing five new brands this year, including premium offerings, intensifying the fight with crosstown rival Woolworths for well-heeled consumers. Woolworths relies almost exclusively on in-house, private-label brands to sit atop the premium segment of the SA retail market.
“Our new Checkers private label products — such as our Simple Truth and Forage & Feast ranges — are positioned for our more affluent consumers. Our Forage & Feast customers generally having baskets 3.5 times bigger than the average Checkers customer,” the group said.
“We have seen very encouraging uptake this year in our premium private label range, developed to meet growing consumer demand for affordable, accessible and healthier, and more sustainably produced food and grocery products.”
Forage & Feast sales growth this year topped 16.4%, rising to several hundred products in 34 categories since its 2020 launch. Simple Truth wellness foods and cleaning products sales rose 18.2% and Lovies baby brand’s 34.1%. The Homegrown private label range had 187% growth this year. “To date, the group has procured R9m and created 36 jobs by collaborating with SMMEs on this programme.”
Shoprite said its HealthFirst private-label pharmacy products, gained traction in the independent pharmacy market.
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