SA’s major retailers are scrambling to secure their share of budget-conscious consumers as the private label market races to surpass R100bn in value this year.
Yet, while Shoprite and Boxer surge ahead, Spar and Pick n Pay are battling to reclaim lost ground.
Faced with mounting competition, rising costs and evolving consumer expectations, both retailers are now doubling down on innovation, quality, and local sourcing to turn their fortunes around.
Private label products, once viewed as budget alternatives, are now mainstream staples in many households. Essentials such as bread, cereals, and eggs lead the charge as inflation-weary shoppers seek affordable yet reliable options.
With aggressive pricing and an extensive range, sales of Shoprite’s private labels grew 12.8% in the past year and accounted for 21.3% of its supermarket sales.
Spar’s private label sales increased by 7% in 2024, while Pick n Pay’s growth on that front, though improving, remains below industry front-runners.
But what is the game plan? Spar’s approach is focused on tiered choices and local roots:
• Signature selection: premium products for “discerning shoppers”;
• Spar brand: mid-tier products offering quality and value; and
• SaveMor and Country Value: budget-friendly essentials for “price-sensitive consumers”.
The strategy aims to ensure no customer leaves empty-handed, whether they’re splurging on gourmet treats or stretching their grocery budget, according to the group.
Spar Southern Africa CEO Max Oliva believes the approach is key to capturing diverse consumer segments.
“This strategic tiering ensures an offering for all consumers, strengthening our competitiveness in the evolving private label market. Additionally, we are expanding our confined brands in select categories to create unique competitive advantages and drive customer loyalty,” he said.
To reinforce the strategy, he said Spar has introduced Country Value, a second-tier range in fresh categories such as meat and produce, targeting cost-conscious consumers without compromising freshness. The focus on essential categories such as fresh produce, meat, and ready meals is expected to drive volume growth. At the same time confined brands such as Spar Chikka Chicken and McCoy Pies aim to build customer loyalty in quick-service foods.
Crucial to Spar’s turnaround is its acquisition of Encore, a dedicated private label business that strengthens its supply chain and enhances cost efficiency.
Oliva said through vertical integration the group will have greater control over sourcing, quality and innovation.
“This acquisition allows us to integrate more deeply into manufacturing, fresh supply, and export opportunities, ensuring greater consistency, quality, and innovation in our private-label offerings. The exciting benefits of this acquisition include increased flexibility, improved cost efficiencies, and greater control over sourcing.”
Beyond product variety, Spar is also focused on in-store visibility and brand awareness. Dedicated private label teams are boosting shelf presence, while a revamped marketing approach underpins the brand’s “as good as the best for less” promise. The group has also implemented reverse logistics strategies, using return vehicle delivery legs, to help cut transportation costs, improving overall profitability, it said.
For Pick n Pay, private labels are deeply embedded in its identity. The No Name brand, launched in 1976, remains a symbol of value, while the PnP range offers premium quality at competitive prices. Building on that foundation, Pick n Pay said it is expanding its private label presence across groceries, fresh produce, beauty, and household goods, with a focus on everyday essentials such as UHT milk, brown sugar, tuna, and chicken.
Collaboration with local suppliers is central to Pick n Pay’s strategy, with more than 90% of its private label products produced in SA, it said. This approach not only supports small businesses but also ensures more rapid innovation and cost control.
“Our private label sales participation varies across product categories (edible and non-edible groceries, as well as fresh produce), and we are seeing encouraging year-on-year growth, with our private label ranges outperforming other brands in-store,” the company said.
“This success is driven by our reputation for quality and affordability, making PnP and No Name brands trusted choices for customers seeking value without compromise. As part of our strategy, we are improving our private label offering, which includes confined-label products, while continuing to innovate alongside brands to ensure a diverse and compelling offering for our customers.”
Pick n Pay is positioning itself as a trusted destination for value-conscious shoppers seeking reliable alternatives to national brands.
But while it and Spar are making strides, challenges remain. Walmart’s recently announced planned entry into the market with exclusive private label products through Massmart could disrupt the status quo. However, Walmart’s limited grocery footprint means the immediate threat may be minimal, according to analysts.
For Spar and Pick n Pay, the real challenge lies not in beating global giants but in proving to SA shoppers that their home-grown brands are still the best choice for their wallets, their families, and their communities.
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