Clicks eyes bigger slice of R900bn township economy as competition intensifies

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Opens in new windowOpens in new windowOpens in new windowOpens in new windowEnter fullscreen mode displaying this image.ExpandClicks CEO Bertina Engelbrecht. Picture: Supplied Clicks says it aims to grow its share of the estimated R900bn township economy by adapting to the spending habits of customers who often buy everyday essentials in smaller quantities, as retailers increasingly target the market.

The JSE-listed retailer is using its KwaMakhi neighbourhood store format to reach customers who may not be served by its conventional stores, competing with established retailers and local shops for spending in densely populated communities.

The next test is whether the format can turn that proposition into a sustainable business.

Clicks launched KwaMakhi in August, opening its first store in Tembisa, Gauteng, followed by outlets in Khayelitsha and Cravenby in the Western Cape. The name roughly translates to “at my neighbour’s”, being a corner-store concept where customers can quickly grab daily necessities.

The stores sell products across baby care, healthcare, beauty, personal care and household essentials, with a dedicated range and private-label products.

The group’s strategy reflects the need to adapt its offer to customers who shop daily or weekly and may have limited money available for each purchase. Clicks CEO Bertina Engelbrecht told Business Day that research conducted before the launch helped the group understand local shopping patterns and the products customers need.

“We were deliberate about entering this market,” Engelbrecht said.

According to Engelbrecht, the group is focusing on accessible price points and smaller pack sizes, alongside product quality. KwaMakhi’s pricing strategy is based on everyday low prices, supported by selected promotions, rather than relying only on discounts to attract shoppers.

However, Clicks’ stated focus on accessible prices does not, on its own, establish that its products are cheaper than those available from spaza shops, supermarkets or other retailers.

That distinction matters because shoppers can compare KwaMakhi’s prices with those offered by spaza shops, supermarkets and other retailers.

In recent years, Shoprite has expanded its Usave discount supermarket format to serve budget-conscious households, while Pick n Pay’s discount offering, Boxer, competes through value-focused food retail. Spaza shops also provide neighbourhood access to everyday goods.

Read: BIG READ | Shoprite: from R1m bet to R200bn retail wonder

KwaMakhi’s proposition combines a smaller store format with a product range that draws on Clicks’ experience in health, beauty and personal care, while adding selected household products and its own private-label offering.

Engelbrecht said the group had identified the township economy as a long-term growth opportunity. The launch statement earlier said the market was estimated to be worth about R900bn annually and has become a major focus for corporate expansion.

Engelbrecht said the business remained in an early learning phase, with customer responses helping the group understand the market. The company has also not set out a firm expansion target specifically for KwaMakhi.

Clicks plans to open 40 to 50 stores across the group in the 2027 financial year, but it has not confirmed that this target includes KwaMakhi outlets.

It is engaging local communities before opening stores and working with local suppliers whose products meet its quality requirements.

Engelbrecht said KwaMakhi was designed to bring trusted products closer to customers and make everyday shopping more accessible.

“We believe KwaMakhi has the potential to become far more than a South African retail concept. While our immediate focus is on building a successful business locally, we see long-term opportunities for the model to expand into Africa.”

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