Shoprite Holdings Ltd
Shoprite Holdings Ltd: Africa’s largest fast-moving consumer goods retail company

With its first stores opening in 1979, Shoprite Group had a bold vision for the future. A vision based on new acquisitions and innovative expansion strategies. Shoprite Group has grown into the world’s leading food retailer today through new acquisitions and innovative expansion strategies. Shoprite Holdings Limited is an investment holding company whose combined subsidiaries constitute the largest fast-moving consumer goods (FMCG) retail operation on the African continent. The Group operates a 301 corporate (owned) and 388 franchise stores and 19 trusted brands. It employs 802 people across its operations in 15 countries, from Cape Town to Accra and the Indian Ocean islands. While the Group’s primary business is food retailing, its offering extends to a broad range of goods and services, including household products, furniture, pharmaceuticals, and financial services.

Shoprite’s mission is to deliver low prices in a world-class shopping environment to customers across the African continent. Shoprite brings choice, quality products and job creation to communities in all the countries it serves. Its low-cost promise has been the foundation of the business for close to 40 years. Shoprite is relentless in its efforts to keep the business efficient and prices low. Food represents a significant portion of expenditure for households. Affordability is one of the key internal metrics of the success of the Shoprite Group, and price leadership remains a focus throughout the business.

The number of South Africans who choose to frequently shop at Shoprite supermarkets is the Group’s greatest validation, but consumers have chosen the Shoprite chain in other ways as well. Shoprite has won six national consumer brand awards in the last year, which substantiates the fact that the Group is delivering on its promise of the lowest prices every day on the things customers need most. Based on two (2) extensive customer satisfaction surveys, known as Brand Health Trackers, Shoprite remains South Africa’s low-price leader, with 80% of customers satisfied or extremely satisfied with the Group’s low prices relative to its competitors.

Pieter Engelbrecht is the chief executive officer (CEO) of Shoprite Holdings. He assumed the role on 1 January 2017, bringing with him extensive operational and management experience gained from over 20 years with the Group. Engelbrecht has been a driving force behind the strategic thinking and decisiveness that characterise the Group’s actions and have led it to become Africa’s largest food retailer and South Africa’s largest private sector employer. Boasting South Africa’s most valuable retail brand, Shoprite is the low-price leader on the continent. Engelbrecht and his team are focused on implementing the Group’s growth strategy throughout Africa to maintain its lead in discount retail for the one billion customers it serves each year. His key priority is serving customers through a relentless focus on lowering prices through an optimised supply chain and world-class operating efficiencies. The strategy he crafted is based on his belief that “together we are stronger”. Every employee is expected to contribute to taking Shoprite forward and understands that his/her role is to serve customers. Pieter is passionate about change and has positioned the group as a business with heart – where making a profit goes hand in hand with a responsibility to the communities in which it operates. Engelbrecht is doubling down on the Group’s efforts to alleviate hunger on the continent and narrowing the inequality gap through job creation, job security, skills development and nurturing small businesses. He is committed to innovating and utilising the group’s enormous scale to deliver the most affordable retail experience for the Group’s customers.

Supply Chain Management
As a result of taking control of Shoprite’s supply chain in line with international best practices in retail, it improved its competitive advantage and sustainability, and has become the largest grocery distributor on the African continent. Today, Shoprite not only holds a leadership position in the grocery industry, but is also leading the industry in terms of distribution. The Group’s state-of-the-art distribution centres and supply line infrastructure, provide greater control over inventory across 15 African countries. This empowers the Group to introduce several cost-saving efficiencies without decreasing margins or compromising on quality.

Fully Owned Fleet
To ensure a timely delivery of goods, a large fleet of trucks and trailers operates 24 hours a day, seven days a week. Sophisticated transport route planning and scheduling software optimises store deliveries and reduce the number of trucks on the road, thereby reducing congestion, lowering our carbon footprint and saving costs. This efficient supply chain infrastructure also empowers small- to medium-sized suppliers to deliver merchandise directly
to centres and avoid the need to invest in either warehousing or vehicles. Trading partners are a vital link in the supply chain, and the Group works closely with partners to create mutually beneficial relationships that go beyond simple supply-and-demand management. The Group has been pioneering reverse logistics initiatives that enhance its sustainability and environmental position, in line with international best practices. The focus is on re-use, recycling and reducing waste to landfill.

Centralised distribution
The Group has invested in an extended centralised distribution network that enables it to seamlessly manage the supply of products to stores across the continent. As the first South African retailer to receive the renowned ISO 9001 accreditation for import and export handling, the Group continues pursuing its strategic supply chain management leadership. The Group’s International Trade Department sources products from anywhere in the world with extreme efficiency, assuring its customers of choice, availability of products and value for money. The Group has invested substantially in creating a network of advanced distribution centres. Its accompanying transport operations are supported by sophisticated information management systems. A substantial portion of the investment in information technology and logistics infrastructure has been devoted to upgrading and expanding its distribution network.

The Group’s technological platforms are continuously being refreshed to keep abreast of technological developments. A new Enterprise resource planning (ERP) system and investments in digital transformation have led to increased efficiencies, more collaboration and better innovation across the Group’s businesses. Continuous investment in customer science and big data allows for improved decision-making in terms of promotions, products, store layouts and pricing.

Social Responsibility
Shoprite acknowledges its responsibility to manage the impact of its operations to ensure long- term economic, social and environmental sustainability. Although Shoprite operates in diverse African countries, most face similar challenges to South Africa: significant unemployment and food insecurity at the household and community level. Climate change will exacerbate these challenges, potentially disrupt production patterns, and increase operational costs for the food retail sector. Shoprite is committed to fighting hunger, supporting food-insecure and disaster- struck communities, enabling access to the economy –, particularly for women – and developing the skills needed to support its growth and that of the broader South African economy. Given the high levels of food insecurity at the community and household levels, Shoprite focuses a significant portion of its corporate social investment spend on hunger relief (39% of spend). Shoprite fights hunger by providing food to thousands of people daily through FoodForward South Africa, which works through 600 beneficiary organisations to feed 250 000 South Africans daily with surplus food collected from retailers. Shoprite recognises women’s significant role in South Africa and Shoprite as customers, employees and suppliers.

The Group works to empower women who have or are starting small businesses or home industries and to identify opportunities for those with the potential to supply Shoprite, helping them develop the relevant skills to grow their businesses into successful operations. In addition to formalised initiatives, the Group runs various annual fundraising events that aim to resolve specific challenges faced by South Africans. These include the following:
• The Disaster Relief Fund, which was launched in early 2016 in response to customer requests that the Group facilitate support to communities in distress or those affected by natural disasters
• The #YellowPacketChallenge, which asked South Africans to fill out a Shoprite shopping bag with essentials, take a photograph of the handing over of the bag to a charity or someone in need, share the image and challenge others to do the same
• Cuppa for CANSA, run in June and July 2017, raised R1 352 352 towards cancer patient care at its facilities.

Human Resources
The Shoprite Group is South Africa’s largest private sector employer, and the growth in all countries the Group operates in necessitates the continuous recruitment of staff across all levels, in different languages and cultures. Attracting and retaining the right people and maintaining healthy relations with employees and labour representatives are essential to continuously improve the Group’s competitive positioning. The Shoprite Group’s bursary programmes provide a pipeline for valuable skills, and learning and development programmes ensure that employees can reach their potential and that the workforce is best able to support the Group’s business objectives.

Question (40 Marks)
Imagine that you are the Head of Human Resource Management for Shoprite Holdings Ltd. You have been invited to give a presentation to the Board of Directors, who are considering a change from in-house to e-human resource management in line with advances in the 4th Industrial Revolution.

Create a Microsoft PowerPoint Presentation outlining a detailed SWOT analysis of the Shoprite Holdings Group, within the human resource management domain, highlighting the benefits of moving to e-HRM.

Answer to Above Questions on Shoprite Holdings 

Answer 1: The powerpoint slides with SWOT analysis on Shoprite Holdings are created as follows:

Strength of Shoprite Holdings

The main strength point of Shoprite Holdings is that it has immense presence throughout Africa as the largest employer, and the company has strong relationship with its employees that allows it in utilising employee efforts towards accomplishing the organisational goals.


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