Shoprite opens its first apparel store, with one eye on PnP Clothing

The Shoprite Group has opened the first outlet of Uniq, its foray into the clothing format, at Canal Walk (alongside its Checkers Hyper).

This is its sixth entry into categories adjacent to its core supermarket business. To date, it is active in the liquor, pharmacy, pet, and baby markets – with only its bottle stores a mature business. It describes its Checkers Outdoor format, with fewer than a handful of stores currently, as a “trial”.

Read: Shoprite taps specialist clothing, pet market

Some have expected the move for a while, mostly because its major rival Pick n Pay has very quietly built a substantial clothing business of its own in the last decade.

Today, it has over 300 standalone PnP Clothing stores, with another 180-odd hyper/supermarkets with a clothing offering. On its already large base, it grew sales by 14.8% between March and August 2022.

This is one of two growth vectors for the retailer over the next three years (the other is Boxer).

PnP will have opened another 67 clothing stores by the end of February, more than it did in the previous three years combined.

‘No comparison’, or at least not much …

The official line is that Shoprite doesn’t appreciate the direct comparison with PnP.

CEO Pieter Engelbrecht told the FM: “We’re not taking on Pick n Pay Clothing … I suppose everybody will be a bit of a competitor – if you give very good quality at better value, then everybody will compete.”

The group says the Uniq range consists of “premium basics” fashioned on value. By comparison, PnP describes its clothing offering as “casualwear-focused” and “value-oriented”.

Both say they are centred on ‘value’ but it is clear from the range and how it is merchandised (lots of careful colour-blocking) that Uniq is a far more ‘premium’ version of value than PnP.

The stores look very different! And for Uniq there is more than a touch of inspiration from Japan’s Uniqlo (including how stock is merchandised).

Read: Fast-fashion upstarts are using Shein’s own strategies against it

Pricing

An example of the distinction in what constitutes ‘value’ is the price of a T-shirt.

At PnP Clothing, basic T-shirts are R79.99, while at Uniq they cost R149 (the lack of 99 cents on all prices helps maintain this more premium aesthetic).

This is a big disparity, but Shoprite would argue that the quality difference should be obvious.

The group has been very clear that it sees a gap in the market for this. Engelbrecht spoke of how consumers have “premiumised” clothing as a category when he first announced this move in November.

It has hired Michael Cole, previously the head of Pick n Pay’s clothing business, to run the unit.

All stores have self-service checkout, which reduces clutter, helps drive the premium positioning, and reduces the number of staff required (the group says each store will create, on average, nine new jobs).

The choice of sites for its first eight stores would’ve been deliberate, but in some ways limited by available space. Opening the first outlet at Canal Walk was symbolic, more than anything, given that Pick n Pay opened its flagship (and largest) clothing store at the mall in October. The latter is about double the size of Shoprite’s first Uniq store.

The rest – Ballito Junction, Secunda Mall, Mall@Reds (Centurion), The Grove, (Pretoria), Galleria Mall (Amanzimtoti), Menlyn Park, Chartwell Corner (Dainfern), and Table Bay Mall – are mostly a mix of major malls and suburban/small-town ones. Landlords will be smiling.

Every one of these, bar one (Table Bay Mall) already has a PnP Clothing (and all bar two have Woolworths clothing stores).

Read:

Interesting move

Chartwell Corner is the most interesting of the Uniq stores that will open this month. This is a new neighbourhood centre, anchored by Checkers, Dis-Chem and a small Woolies Food.

Its location – at the Cedar Road entrance to the upmarket Dainfern Estate in northern Johannesburg – will allow Shoprite to test how receptive this segment of customer (think Bryanston/Constantia/La Lucia/Plett) will be to its apparel proposition. The new format Checkers (with Kauai and Starbucks) is surely trading well, which would’ve given it the confidence to use this site.

Strategy

The strategy of opening basics-focused clothing stores in neighbourhood centres isn’t new. Coles would’ve spearheaded the push by PnP to add clothing stores to these types of centres, many of which have Checkers as an anchor grocery tenant.

Woolworths, too, has stuttered into the space with its ‘W Edit’ stores, which have a vastly slimmed down range of basics and will also be found at a neighbourhood centre, not a mall.

This would not have gone unnoticed by the Shoprite Group.

Read: Could Woolworths’s fashion turnaround strategy finally be taking shape?

Engelbrecht told analysts in November the group would “start small” with “10 to 12” clothing stores and “build slowly”. By the end of April, it will have nearly reached this target. By contrast, it took seven months for it to open its first 10 Petshop Science stores. Other efforts, like Little Me, have been far more measured.

Engelbrecht has been insistent that the group will be prepared to walk away if Uniq doesn’t work. He told analysts in November: “We have this philosophy at Shoprite – fail fast – if we feel it takes too much effort and doesn’t give the return we move on.”

Still, might that stated starting target of “10 to 12” stores be too low?

We’ll know soon enough. And it’s not just Pick n Pay who will be watching closely. Woolworths, given its heritage and dominance in quality basics (despite recent hiccups), ought to be looking over its shoulder …