SA’s township economy, a vital component of the country’s informal sector, has become a high-stakes battleground for major retail players in 2025, with major grocery retailers Shoprite and Boxer leading the charge.
With Boxer’s recent listing on the JSE and aggressive expansion plans, 2025 promises a fierce competition between these two giants for dominance in the rapidly growing township market.
Valued at more than R600bn and contributing more than 6% to the nation’s GDP, this sector presents both challenges and opportunities for formal retailers like Shoprite and Boxer, as they compete for dominance in these underserved markets.
Shoprite, a dominant force in the grocery retail sector, operates 638 stores nationwide, having opened 14 new supermarkets in the last two months alone. In December, it celebrated the opening of its 150th Gauteng supermarket at Johannesburg’s iconic Carlton Centre.
In the 2024 financial year, Shoprite created 6,490 new jobs, showcasing its commitment to economic growth. The group’s revenue surged 12%, with trading profit up 11.7% to R13.4bn, driven largely by its Supermarkets RSA division, which includes Checkers and Usave.
Usave, Shoprite’s discounter brand launched in 2001, is central to its township strategy. The chain operates 463 stores and plans to double its store count in the next five years. Usave’s growth is boosted by the introduction of its eKasi container-store format, which enables expansion into areas where traditional retail outlets are not viable.
In 2024, Usave sales shot up by 13.2%, making it Shoprite’s fastest-growing brand. The group’s acquisition of Massmart’s Cambridge Foods stores in 2021 has further bolstered its position in the township market, as many of these outlets were converted into Usave and other formats.
Boxer, owned by Pick n Pay, is also targeting the township economy with an ambitious plan to open more than 500 new stores over the next seven years. Boxer currently operates 500 stores nationwide, including 308 Superstores, 162 Liquor Stores, and 30 Build Stores.
The retailer previously said it had identified a R105bn growth opportunity in the discount market and aimed to formalise grocery shopping in underserved areas. With the informal grocery sector comprising 34% of SA’s market, Boxer is looking to capture a significant share by offering structured and competitively priced alternatives to informal vendors, it said.
As fierce as the competition may be, Investment analyst Muneer Ahmed said the market currently has enough room for both Shoprite and Boxer to grow and co-exist. However, he cautioned that long-term competition between the two could intensify as independent retailers lose market share.
Despite the rapid expansion of discounter retailers, the informal retail sector, dominated by spaza shops, continues to thrive. Research by Trade Intelligence valued the informal FMCG market at R197bn in 2023, representing 6.9% growth. With over 150,000 spaza shops serving 11 million people, this sector contributes 33% of the country’s FMCG market and remains critical to the economy, the research found.
Trade Intelligence said spaza shops are embracing technology, with younger consumers using platforms like WhatsApp and Uber Eats to place orders. Fintech solutions such as digital payment systems and cost-effective merchant services have also been widely adopted, enhancing efficiency and profitability. Major suppliers, including Unilever, SAB, and Coca-Cola, are investing in this sector through promotions, store upgrades, and training programs.
Retail giants are also tapping into the informal market. Shoprite Cash & Carry now offers online shopping and free delivery services to spaza shops, while Spar incorporates local businesses for delivery in townships.
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