Will this be the only one, or will stores in other areas that are no longer ‘suitable’ for a hyper be converted?
The next few years are going to be very interesting for landlords as they navigate the hypermarket landscape with Pick n Pay, Boxer and Shoprite.
Pick n Pay has quietly shut one of its Hypermarkets, the store known as Hyper Vaal. This is the first Hypermarket that it has closed in the country. It is located in the Bedworth Centre, on the R42 (Barrage Road) in Vanderbijlpark (diagonally opposite the Vaal Makro).
It closed in November 2023 and is unrelated to the current store closure and conversion programme announced by CEO Sean Summers as part of the group’s strategy to restore its core Pick n Pay business. This decision would’ve been made months, if not years, prior to Summers returning to the retailer.
The surrounding areas have changed significantly over the last few decades, which means the overall market the store serves is very different now from when the hyper was opened.
Summers has been clear that the retailer won’t simply keep trading at stores that are unprofitable for the sake of doing so.
This store must’ve been a particularly poor performer, given that it wasn’t even left to Summers and his team to make a call on the closure.
Boxer and Shoprite replace store
What’s notable is that a Boxer Superstore and a Shoprite have opened directly alongside each other in the box vacated by the hyper. This means the two will go head-to-head for the same shoppers, albeit through two different wings of the centre, and even though their offerings are slightly different.
Typically, malls with two supermarket anchors situate these at opposite ends of the centre. But given the sizeable vacancy left by the hyper – around 14 000m² – landlord Vukile Property Fund had little option but to locate the two stores alongside each other.
Boxer and Shoprite are the two new anchors of the centre. Both brands also added liquor stores to the centre (the Shoprite Liquorshop, however, is not adjacent to the supermarket, while Boxer Liquor is).
Bedworth Centre store layout.
The Boxer opened on 1 November and attracted 10 000 visits on the day. Shoprite opened on 28 November, the day before Black Friday.
More choice for shoppers
Retailers have agreed to phase out long-term exclusive lease agreements, which were practically standard in all malls in the past. Spar was the third retailer to sign a consent agreement with the Competition Commission.
It did so in 2023, following earlier agreements with the Shoprite group and Pick n Pay (owner of Boxer).
This means shoppers will increasingly have at least two options when it comes to supermarkets.
Summers has said there are developments and centres in mass market areas that could be anchored by both Boxer and Pick n Pay. He explains that these brands and stores serve completely different segments with very different propositions.
The first of many?
It remains to be seen whether this is the only Hypermarket to be affected or whether stores in other areas that are no longer ‘suitable’ for a hyper are converted. There may well be question marks over the Hypermarkets in Steeledale and Soweto (Maponya Mall). Generally, decisions like these are taken collaboratively with landlords.
Aside from in-store refurbishments, the group hasn’t really redeveloped any of its Hypermarket properties. These have been refurbished as they made sense. For example, it refurbished the ‘Hyper By The Sea’ in Durban North in 2017 and again more recently in a transition to a ‘newer-look’ store.
Summers is excited about the group’s plans to redevelop the Faerie Glen Hypermarket in Pretoria East. This is a prime site in a lucrative market that Pick n Pay is extremely lucky to have (perhaps as an accident of history).
It will reduce the space taken up by the store to 8 000m², of which 6 500m² will be trading. The space will be transformed into a lifestyle centre with additional tenants.
It has already sharply reduced space at Northgate, Johannesburg, where the size of the Hypermarket was practically halved. It did the same at its Hyper in Ottery in Cape Town. It must surely be looking closely at Woodmead and trying to find a solution for a space that is simply too large.
None of these stores need ‘converting’, directly or otherwise, to Boxer stores. But the next few years are going to be very interesting indeed for landlords as they navigate this with Pick n Pay, Boxer and the Shoprite Group, which is aggressively seeking space.