Shoprite and Woolworths began from opposite ends of the market. One is a mass-market, scale-driven operator, the other a premium lifestyle brand. But their latest interim results reveal they are now converging more directly than ever — not just in premium groceries, but across a widening array of adjacent businesses.
The battle for the affluent consumer has been building for years. Today, the sharpest new battleground is pets. Woolworths acquired Absolute Pets in April 2024 and now operates more than 200 of these stores. Shoprite launched Petshop Science in April 2021 and has 173 stores. The pet market itself has shifted since Covid, with younger consumers treating animals as family members and spending accordingly on nutrition, wellness and accessories.
Pets are just one front. Both retailers overlap in on-demand delivery, clothing and, to a lesser extent, outdoor and beauty — all chasing the same affluent consumer, with Shoprite doing so primarily through its Checkers brand. The retail environment is competitive, so the companies are identifying adjacent businesses with scope for expansion and higher returns.
Both groups reported margin pressure in their supermarket divisions. Woolworths faced headwinds from long-term capacity investment in its distribution centre, faster growth in lower-margin categories like kidswear and babywear, and increased promotions.
Shoprite recorded slower internal inflation of 0.7% while deliberately investing in price and aggressive discounting. Yet it still delivered 7.2% sales growth in its most recent six-month period, outgrowing the formal retail market by 2.3 times. Even with 14,400 product lines cheaper than the year before, volume held up.
Woolworths put in a solid set of interim numbers for the 26 weeks ended December 28 2025. CEO Roy Bagattini says these results “reflect the significant progress we have made in our strategic initiatives and demonstrate that we are clearly and deliberately shifting the trajectory of our business”.
Turnover and concession sales rose 5.4% to R42.5bn, adjusted ebitda was up 3.2% to R4.6bn, and headline earnings per share climbed 9.6% to 167.4c. The interim dividend jumped 10.3% to 118c a share. Food turnover grew 7% overall and 5.2% on a comparable-store basis, with price increases running at 4.6%.
Shoprite’s group revenue increased 7.1% to R138.9bn, with diluted headline earnings per share up 7.9% to 708.9c. Its core South African supermarkets segment exceeded R100bn in sales for the half-year, a milestone. The group has opened a net 273 stores over the past 12 months.
Thin and structurally pressured grocery margins will continue to push both retailers towards higher-margin adjacent categories. While pet care and beauty are high-frequency, emotionally driven businesses with strong repeat purchases, financial services carry even better margins. And the more touchpoints each group owns, the deeper customer relationships become — and the richer the data.
For Shoprite, adjacencies feed directly into its loyalty strategy. Every new category adds intelligence to its Xtra Savings programme. CEO Pieter Engelbrecht describes a deliberate process of mining customer behaviour data to identify where people’s lives are heading, and following them there.
“We’ve opened some of these adjacent businesses based on the data we have — how people behave, what they buy, what’s happening in their lives,” he says. The group now has 572-million customer visits every six months.
Shoprite has flagged clothing, baby, outdoor and pet as expansion priorities, and has identified a structural shift in how South African consumers approach health, personal care and beauty. It is opening standalone Medirite Plus pharmacies — 22 are trading, with plans to expand to 56 in the medium term — backed by 140 pharmacy licences and 118 in-store Medirite dispensaries. And Transpharm, its pharmaceutical wholesale and distribution business, has added 873 new customers since moving into its new facility.
Two smaller but telling additions to the portfolio are Little Me, its baby and toddler retail offering, and an outdoor and camping brand. “After Covid there was this tendency for people to do more camping and spend more time together,” says Engelbrecht.
Shoprite’s financial services arm offers money transfers, bill payments, insurance and personal loans. The group has a Money Market account, which it says is the lowest-cost bank account in South Africa. There are no monthly fees, only a flat R5 charge when cash is withdrawn. It will provide more detail on its banking ambitions at year-end.
It also owns Computicket, South Africa’s largest ticketing provider. “There’s a lot of interest from financial institutions, insurance and banks in Shoprite because of our very large footprint and the fact that we trade seven days a week,” Engelbrecht says.
The strategic anchor of it all is Checkers Sixty60. Sales through the on-demand platform surged 34.6% to R11.9bn in the period. Shoprite is building towards a single platform where consumers can navigate from groceries to personal care, pets and baby items. In time this will be AI-guided.
The group has been investing about R8bn a year for three consecutive years, and Engelbrecht says the returns on earlier technology investment are now flowing through. Promotional participation in customer baskets has risen to 40%, guided by algorithms. In the six months under review, Shoprite sold 9.5-million items at R1 each and 55.6-million items at R5 or less.
Steph Erasmus, investment analyst at Anchor Capital, says Shoprite and Woolworths both experienced gross margin pressure, but he reckons the situations differ slightly. Shoprite’s pressure was largely a one-off accounting reclassification in the South African core with some externally driven weakness in non-South Africa.
Woolworths’s margin pressure was multidivisional, a combination of investment-driven depreciation in food, deliberate strategic price investment in fashion, beauty and home (FBH), with ongoing category mix dilution from beauty and online, and inventory clearance.
Woolworths has formalised its own diversification under WVentures, described by Bagattini as “designed to accelerate and scale high-potential, adjacent businesses, focused exclusively on unlocking strategic growth opportunities with greater speed and agility”. It houses WCellar (wine and liquor with 30 standalone stores), WEdit (a smaller-format clothing concept with 50 stores), the food service business (WCafe, Coffee Carts and NowNow in 250 locations) and the pet division. Woolworths is expanding into school tuck shops, with two already open in Cape Town.
Beauty has been a standout. Woolworths has rolled out beauty halls, with beauty revenue more than doubling to over R1bn in the past two years. Within FBH, beauty grew 8.9% in the latest period — positive, though slightly slower than the prior half — while the home section was the stronger performer at 14%. FBH turnover overall was up 6.2%, with the group reducing its footprint: net trading space fell 1.9%.
On delivery, Woolies Dash revenue grew 23%, with the online channel now contributing 7.2% to South African food sales. The group recently introduced Woolies After Dark, leveraging the Uber Eats service to allow orders from 70 Engen Foodstops until midnight.
For now, Bagattini says the investment phase is complete and the group is not actively pursuing acquisitions. But it would be open to buying businesses of the calibre of Absolute Pets should the right opportunity arise.
Casparus Treurnicht, portfolio manager at Gryphon Asset Management, says Shoprite has done a superb job over the past few years in protecting its margins. “Woolworths dropped by quite a bit, but this was due to its troubles with FBH and Australia.” He contends that some margin has been lost in its food business, but adds that Woolworths has done quite well in protecting its target market. Shoprite has tried to take some share through its convenience and fresh offerings.
“There does seem to be a recovery in Woolworths’s margins lately and the standout performer was FBH after multiple years of underperformance,” Treurnicht says.
Both retailers are mirroring and countering each other’s moves with unusual precision. Both are watching competitive threats arrive from outside traditional retail.
Engelbrecht says: “The landscape is blurring. Banks are moving into retail, and retailers are moving into banking. Financial services, insurance, media and data monetisation are all now part of the growth conversation.”
The economy, he notes, isn’t expanding. “The cake doesn’t get bigger. We’re all encroaching on each other’s business.”
The question now is which ecosystem proves stickier — and which company captures a greater share of what South African consumers spend beyond the weekly grocery run.