The fast-moving consumer goods (FMCG) price war, long driven by heavy discounting and promotional deals, is starting to reach its limits, according to Trade Intelligence’s 2026 South African FMCG Retail Outlook.
While some retailers continue to lean hard on specials to win shoppers, others have warned that constant promotions are hurting margins and may no longer be sustainable.
Trade Intelligence said promotions have become deeply embedded in how South African retail works. For years, price competition through specials, discounts and loyalty offers has been a crucial tool for retailers trying to attract cash-strapped consumers. But as the market’s “promotional intensity” rises the benefits are diminishing. Promotions no longer guarantee loyalty and are squeezing profit for retailers and the manufacturers that supply them.
Among the major players, Clicks stands out for its heavy reliance on promotions. In the retailer’s latest financial year, promotional sales grew 12.4%, accounting for 47% of total turnover. With a group turnover of R47.8bn and retail turnover of R37.6bn, nearly half of what Clicks sells comes from products sold on promotion, a figure that Trade Intelligence said is among the country’s highest.
Shoprite has taken a different tack. In its latest annual results, Shoprite reported returning R16.5bn in instant cash savings at the point of sale to 33.7-million Xtra Savings members, using discounts as a tool to reward loyalty rather than relying solely on marked-down promotions.
The group’s total merchandise sales rose 8.9% to R252.7bn, with its South African supermarkets up 9.5% to R213.5bn. Shoprite kept internal selling price inflation in its supermarkets at just 2.3%, using stable pricing as part of its broader value strategy.
“South Africa has a high and increasing reliance on special offers, discounts and promotions,” said Trade Intelligence senior analyst Nicola Allen.
“There are different attitudes to promotional intensity levels, with Clicks embracing its high level of promotional intensity, while Shoprite warns of margin erosion.”
South Africa has a high and increasing reliance on special offers, discounts and promotions, There are different attitudes to promotional intensity levels, with Clicks embracing its high level of promotional intensity, while Shoprite warns of margin erosion.
— Nicola Allen, Trade Intelligence senior analyst
Trade Intelligence said this split reflects a growing strategic divide in the industry. Some retailers, such as Clicks, are still betting on high promotional intensity to drive volumes, while others, including Shoprite and other mass retailers, are moving toward more predictable pricing and targeted savings to protect margins and build shopper trust.
That reflects deeper problems with the old price-war model. According to Trade Intelligence research, South African households typically shop at four or more retailers and use multiple loyalty cards. This has helped create a class of “promo-only shoppers” who buy only when items are discounted, rather than becoming loyal to a particular store or brand. Promotions, once a competitive edge, are now expected and plentiful, making it harder for retailers to stand out.
Yet promotions have costs. Trade Intelligence said retailers and manufacturers face limits on how much price pressure they can absorb internally, how deep discounts can go and how far promotions can be pushed before they undermine profitability or brand value. Constant discounting also reduces the room to invest in stores, staff and other parts of the customer experience.
The sector’s price war is thus evolving. Trade Intelligence said value competition is changing from blanket promotional programmes to more personalised offers based on shopper behaviour and consistent everyday pricing that signals trust and stability. Retailers such as Boxer, Makro and newly opened Walmart stores are already emphasising everyday low price strategies over constant specials.
“Behind these shifts sits a commercial reality: retailers and suppliers are trying to balance affordability for shoppers with sustainability — what makes financial sense and is viable for their businesses? And for shoppers, the result is likely to be a value experience that feels less noisy, more personalised and, over time, more predictable, even as price sensitivity remains high,” Allen said.
“Value is not losing importance in South African FMCG retail, but it is changing shape. While still driving volumes, simply increasing promotional intensity or discount depth delivers less loyalty and profit for both retailers and brands.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.