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2020-08-04

Checkers grocery delivery app 'eating competitors' lunch'

Sixty60, a grocery delivery app run by Shoprite's segment, Checkers, has cemented its position in less than a year, with confirmation from the group that it is now operational from 87 stores.


Anathi Madubela | Fin24

Launched in November 2019, the app has not only contributed to Shoprite's yearly sales, it has surpassed rivals that have been operational for longer.

 

In a trading update on Monday, the Cape Town-based retailer said group sales rose by 6.4% to about R156.9 billion in the 52 weeks to 28 June, with South African customer visits declining by 7.4%.

However, average basket spending increased by 18.4%.

The group said by June 2020, the Sixty60 app was operational from 87 stores nationwide.

The app's initial aim was to deliver groceries within an hour. However, the group has had to move away from hourly dispatching due to overwhelming demand during lockdown. It now promises same-day delivery. 

Customers can track the status of their order and delivery in real time.

Lulama Qongqo, an investment analyst at Mergence Investment Managers, said she was impressed with the update, given that at the start of lockdown, the app was operating from just 10 stores, which at the time had "worried" her. 

"To me this update was very unexpected… Woolworths and Pick n Pay have always had online shopping offerings. I cannot say for sure what it is about Shoprite, but whatever it is they are doing it right," she added.

Like Shoprite, other retailers have attempted to ensure continuity during the lockdown. Pick n Pay partnered with Bottles, an alcohol delivery app that expanded into groceries with the promise of same-day service.

Woolworths, too, continued deliveries.

Qongo said customers would have had high expectations of Woolworths due to its brand identity and established footprint. 

"Woolworths is the one company that should have been doing the best at online shopping simply because of its target market.  

"Their market has high-earning individuals who are located within close proximity of Woolworths stores, they live in a high-density area and there are high levels of mobile penetration, they have access to the internet versus the customers of Checkers."

In Qongo's view, "Shoprite's eating their lunch".

Syd Vianello, a veteran retail analyst, said the test would lie in whether the customers were retained. 

Covid-19 had accelerated a certain fundamental shift in shopping behaviour, but this did not necessarily mean the way people shop had changed, he added.

"Online shopping has been accelerated by Covid-19 and we do not know what percentage of Shoprite's business is online, it's probably still very small but it has certainly given them a head start over their competitors.

"Now it depends on how quickly we can overcome Covid-19 and how quickly, if at all, consumers go back to their ways of shopping and we don't know the answer at this stage but what they've  done so far, they have done extremely well.

"Execution has been good," said Vianello. 

 


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