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Our supply chain

Maintaining high levels of efficiency

We continue to invest in innovative information and technology systems and infrastructure to ensure our supply chain remains world-class and efficient. Through integrated planning, procurement, logistics and sales, we optimise our business efficiency at scale, to the extent that our supply chain – which controls our local, import and export activities – is fully amalgamated with our enterprise resource planning (ERP) system.

Our streamlined supply chain generates cost savings for our business, our suppliers and our customers and it lowers our environmental footprint by reducing carbon emissions, as well as packaging and food waste.  

 


29 distribution centres encompassing 673 843 m2


820 trucks
and 1 273 trailers


807 trucks fitted with solar pv panels


18 709 hours
driver training

* For the year ended 4 July 2021

 

 

How our supply chain enables retailing

Our procurement practices are focused on developing long-standing relationships with our suppliers. Procuring from local suppliers, within the countries we operate, enables us to deliver on affordability while reducing our environmental impact. Our scale and route to market supports the development of local production where possible and promotes overall availability within the country.

Our centralised supply chain benefits our customers

Our centralised supply chain helps us deliver on our business promise of everyday low prices.

Our supply chain is fully integrated with the Group’s ERP system. This gives us a competitive advantage and allows for greater collaboration across all aspects of the chain, creating benefits in planning, procurement, warehouse logistics and distribution, while enabling us to manage efficiencies and deliver on our promise of everyday low prices.

Our store base and centralised distribution model provide us with a closed-loop supply chain ecosystem, allowing us to manage and integrate our supply chain right down to shelf level and to derive benefits beyond centralised buying, warehousing, distribution and logistics.



The efficiency of our supply chain benefits our suppliers

The Shoprite Group prioritises supporting local suppliers wherever possible. This not only enhances our ability to contribute to local economies and develop local and small suppliers, but it also reduces our environmental impact.

Including and developing SMEs in the supply chain allows us to grow and diversify by providing various options and a continuous supply pipeline for products and services.

On the other hand, our centralised distribution model gives our suppliers access to a more efficient route to market than the costly direct-to-store option where supplier vehicles drive further and waste time between individual store deliveries, enabling the Group to give smaller enterprises access to market.

SUPPORTING LOCAL PROCUREMENT

In this financial year we moved procurement of private-label grocery ranges with a sales value of R269.6 million to local suppliers. We are proud that 87% of our private-label grocery range is locally produced. In developing private-label ranges, we prioritise local suppliers. It is only when local supply does not meet demand – or where production is geographically bound, such as rice – that we source outside of South Africa.

BUILDING A RESILIENT SUPPLY CHAIN THROUGH DIVERSIFICATION AND SUPPORT

The Shoprite Group estimates that we do business with three times more local growers than other South African retailers. We currently negotiate directly with 437 growers in South Africa; 219 of which are SMEs that supply produce to the value of R340 million. In Non-RSA countries we work with 725 growers which supports affordability for our customers and grows local economies in the countries we operate. This level of diversification supports a wider network of growers while reducing the risk of not being able to source produce when we need to. In a changing climate increasing adaptability through diversification is essential in building a resilient supply chain.  



Integration of our supply chain benefits our franchisees

Providing franchised stores with the best of both worlds.

Our OK franchised stores benefit from the Shoprite Group’s scale, providing customers with quality and affordability while benefiting from our supply chain infrastructure, systems and resources.

The franchise members have the freedom to buy locally and support the communities in which they operate. In this difficult year, our members also received COVID-19-related support daily, which helped them to comply with regulations.

 

 

A reliable distribution centre network

Our centralised supply chain enables greater efficiencies across our footprint. Within this model, suppliers deliver to 29 distribution centres (DC), from which products are picked and dispatched to our stores. This challenging year of travel and lockdown restrictions reaffirmed that having a centralised distribution network enables a faster response and more consistent supply and service to our supermarkets. This further supports our continued focus to expand our centralised DC infrastructure to support the growing needs of the business and our supply base.

Our network of DCs makes certain we are closer to a wide variety of suppliers and that our DCs in turn are closer to our stores. This ensures we have the shortest, most agile and responsive supply chain in South Africa. By shortening our supply chain, we can reduce the carbon footprint of the products we sell while supporting smaller local producers. This also reduces transportation costs and helps in our endeavours to supply high-quality fresh produce to all our brands at affordable prices.