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Shoprite’s aggressive expansion drive has received a boost after the Gauteng High Court ordered Spar to vacate a shopping centre in Midrand, paving the way for the country’s largest retailer to occupy the premises.Spar tried in vain to retain its occupancy of the site against the landlord’s wishes, with the court ruling that the landlord was within its rights to sever ties to the embattled retailer.This was largely because Spar failed to exercise a lease renewal option within the required contractual timeframe.The loss of a strategic supermarket location to Shoprite underscores the increasingly intense battle among South Africa’s grocery retailers for market share and prime retail space. For mall owners, retailers such as Shoprite are increasingly viewed as key anchor tenants, catering to different segments of the market through their various brands. Over the past few years, Shoprite has capitalised on challenges faced by rivals, particularly Pick n Pay and more recently Spar, by securing leases and taking over stores in sought-after locations. The latest court victory strengthens the retailer’s expansion drive while competitors face operational and financial pressures.In a judgment delivered on July 13, the Gauteng High Court ruled that Spar had failed to validly renew a lease before its expiry on April 30 this year, clearing the way for Shoprite to take over the premises. Acting judge S van Aswegen ordered Spar to vacate the property by August 28.The dispute centred on a supermarket site in a Midrand shopping complex that had long been occupied by a Spar store operated by franchisee Tortello Trading. The shopping centre was later acquired by Eco Energy Projects, which intended to lease the premises to Shoprite. The judge ruled that Spar “failed to justify its continued occupation of the premises”, describing the attempted renewal as “belated” and outside the required timeframe. For Shoprite, the ruling represents another win in an expansion strategy that has accelerated significantly over the past year. The retailer has gained market share in the grocery sector for the past six consecutive years and has been growing at more than twice the pace of the broader market.In a statement released last month, Shoprite said it had already exceeded its store rollout target for the year. The group opened 268 stores across its Supermarkets RSA division in the first 11 months of its financial year, surpassing the 223 stores initially planned.The expansion included 48 Usave stores, 41 Shoprite supermarkets, 30 Checkers supermarkets and 92 LiquorShops, taking the group’s total store count to more than 3,000 outlets. The company has also accelerated growth in newer formats such as Petshop Science and UNIQ Clothing by Checkers.“The accelerated store openings reflect a deliberate strategy to continue advancing the group’s rapidly growing omnichannel retail platform,” Shoprite said at the time.Much of that growth has been concentrated in Gauteng, where the retailer opened 82 stores during the period, followed by the Western Cape and KwaZulu-Natal. Shoprite spent R3.9bn in the six months to March expanding and upgrading its South African store network.The accelerated store openings reflect a deliberate strategy to continue advancing the group’s rapidly growing omnichannel retail platform— ShopriteThe court victory comes as Spar works to stabilise its operations following a difficult period marked by distribution failures, higher debt levels and strained relationships with some retailers. The group has also faced operational challenges linked to its SAP (systems, applications and products) implementation, declining retailer loyalty, margin pressure and the complexity of managing offshore operations. The sale of businesses in Poland, Switzerland and, more recently, the UK, has allowed Spar to refocus attention on its core South African and Irish operations.New CEO Reeza Isaacs has acknowledged that the group’s problems stem largely from operational execution rather than market conditions and has made turning around the KwaZulu-Natal distribution centre a central part of Spar’s recovery strategy.Spar has 2,523 stores across Botswana, eSwatini, Lesotho, Mozambique, Namibia and South Africa.Analysts have said that Shoprite and Woolworths are taking market share from Spar and Pick n Pay.Casparus Treurnicht, portfolio manager and research analyst at Gryphon Asset Management, said previously that Shoprite “is probably going to remain at the forefront due to their diversified exposure to various levels of the RSA consumer”.Business Times
