Spar Group plans chain of up to 40 high-end grocery stores

Source: Reuters/Siphiwe Sibeko

South African grocery retailers are increasingly tailoring stores to wealthy or low-income customers in a market that is becoming more polarised.

"The strategy includes converting high-end niche Spar stores while also opening new locations in strategic sites. We anticipate around 30 to 40 Gourmet stores in the future, though no fixed timeline has been set," Max Oliva, Spar Southern Africa CEO, told Reuters.

The South African retailer owns several Spar country licences of the Dutch SPAR group.

Presenting on Wednesday at the company's capital markets day, Oliva told investors that the new Spar Gourmet format would target customers in high-end residential and urban areas.

"Key focus areas include premium food solutions, coffee, bakery, and indulgent products, with a curated assortment tailored to meet the needs of a more affluent customer base," he said.

Spar Gourmet and discount chain SaveMor are part of the group's segmentation strategy, similar to what rivals Pick n Pay and Shoprite have been doing in recent years.

To strengthen its position in the competitive discount grocery sector, Spar will also be revamping the SaveMor chain.

South Africa's higher-end grocery market is dominated by Woolworths, followed by Shoprite's Checkers chain. In the discount space, Shoprite has Usave and Pick n Pay has Boxer.