Sales in supermarket giant Shoprite’s high-revving Sixty60 delivery unit scooted 47.7% higher in the year to end-June — a remarkable achievement, considering the 58% growth clocked up in the previous financial year. Operating out of 694 stores (up from 539 stores a year ago), the delivery service is now used by households and small businesses.
The delivery service has become a cornerstone of Shoprite’s strategy. Sixty60 posted R18.9bn in sales last year, the first time the group released the quantum of these sales. Delivery service sales now account for a chunky 8.9% of supermarket sales, with more than 100-million deliveries completed by July.
“We make money on it — and a very good return on investment,” says Shoprite CEO Pieter Engelbrecht. The model relies on “pick-from-store” fulfilment, low costs and fast delivery tracking times. The service has already created 15,200 jobs and is now South Africa’s largest digital retail platform.
Sixty60’s range keeps expanding: from groceries and premium pet food to hairdryers, pool salt and even iPhones. Clothing will be added in coming months, with an item returns functionality being built. Pharmaceuticals are next. “That’s going to be huge. We are working on it so that once you leave the doctor, before you get home, your medicine will be there.”
Engelbrecht says consistent on-shelf availability is crucial to run a business like this. “It’s not an app, it’s not the web — it’s a platform with scalability.”
To put the size of the delivery platform in context, Pick n Pay turnover for the year ending March 2025 was R118.6bn. Woolworths this week released results showing annual turnover at R81bn, and Spar for September 30 reported group turnover of R152.3bn.
We make money on it — and a very good return on investment
— Pieter Engelbrecht
Shoprite opens about five stores a week; 309 are planned for the year, with 79% of its R7.9bn capex earmarked for new stores and upgrades, IT and the supply chain. Engelbrecht says developers want Checkers as anchor tenants, and in some centres Shoprite and Checkers are dual anchors.
Engelbrecht rejects notions that the group is overexpanding: “I don’t think there’s any factual basis for saying that.” Stores double as fulfilment centres for Sixty60, ensuring strong returns. Group return on invested capital has increased from 15.4% to 19.4%.
Overall, Engelbrecht says food retail is “as competitive as it’s ever been”, with promotions playing a bigger role as consumers are under strain. Yet volumes grew 4.8% and customer visits rose 4.6% to 1.2-billion. And contrary to popular belief that prices only rise, Engelbrecht notes 13,300 items were cheaper this year than the previous year. “So prices did come down.”
Adjacent businesses such as Medirite, Petshop Science, Uniq clothing and Checkers Outdoor are growing fast (up 39%), though still small at 0.5% of group sales. Petshop Science alone added 60 outlets this year.
Over five years, Shoprite has added nearly 700 stores and attracted 200-million additional customer visits.
The focus on local is also paying off. Group revenue increased 8.6% to R257bn, while South African supermarkets rose 9.5% to R213.5bn. Trading profit was up 16.6% with expense growth contained at 7.4%, while headline earnings per share growth lifted 15.8% to R13.67 a share.
Nedbank senior equity research analyst Paul Steegers says in a note that the outlook is cautiously optimistic, and Nedbank retains its overweight recommendation. He notes that Checkers remains the fastest-growing food retail brand in the country.
A note from Investec says the sheer scale of Sixty60 and the broader Supermarkets RSA business, combined with best-in-class execution, suggests Shoprite is likely to be a long-term market share winner. With the food inflation headwind dissipating and its concerns addressed, Investec sees an entry opportunity for Shoprite and has upgraded the share to a buy.
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