Historically, South Africa has been positioned as one of the world's most divided countries in terms of social groups. Despite some improvement anticipated over the forecast period due to government efforts to reduce inequality, the income gap will likely persist, resulting in continuous demand for discounters among lower-income groups.
The competitive landscape of discounters in South Africa is likely to remain concentrated among Pick 'n' Pay Retailers and Shoprite Holdings, supported by their substantial brand equity in the discount model and strategic position in lower-income areas. Nevertheless, the competitive landscape will intensify, partly driven by the ambition of Pick 'n' Pay Retailers to accelerate the rollout of its Boxer stores over the forecast period.
Despite digitalised services gaining traction in South Africa since the pandemic, operators of discounters remain reluctant to embrace online services, due to various factors such as limited disposable incomes of the target audience (making internet data prices expensive for most households) and relatively lower margins of the channel due its emphasis on value proposition.
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Understand the latest market trends and future growth opportunities for the Discounters industry in South Africa with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Discounters are chained retail outlets typically with a selling space of between 400 and 2,500 square metres. Stores have a primary focus on selling a limited range of foods, beverages, tobacco and non-groceries at budget prices, regularly via private label. Discounters can be classified as hard discounters and soft discounters. Hard discounters, first introduced by Aldi in Germany, are also known as limited-line discounters. Stores are typically 400-900 square metres and stock fewer than 1,000 product lines, largely in packaged groceries. Product range available is predominantly made up of private-label brands. Soft discounters are usually slightly larger than hard discounters, and are also known as extended-range discounters. Stores typically stock 1,000-4,000 product lines. As well as private-label and budget brands, stores commonly carry leading brands at discounted prices. Example brands include Aldi, Lidl, and Dia.
See All of Our DefinitionsThis report originates from Passport, our Discounters research and analysis database.
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