Cape Town - Shoprite Holdings, the biggest food group in the country, will hive off the Checkers brand, housed under the Shoprite banner for 10 years, and position it with its Hyperama chain for a better fit.
Whitey Basson, the managing director, said yesterday Checkers, which has traditionally targeted the middle- to upper-income groups, had become more viable and therefore needed more strategic focus.
"There are close to 100 Checkers stores, which can be redirected to cater properly for the top end of the market," Basson said. Hyperama, with 18 stores, already had a profile in the top end of the market.
Brian Weyers, the general manager for marketing at Shoprite, said all of the group's Hyperama stores would be re-named Checkers Hyper. The Hyperama branches, which had not been revamped in the past 10 years, would be changed to resemble the new branding for the Checkers Hyper outlets.
Management would reassess the situation at the end of the year.
"Hyperama shares the same target market as Checkers. It is not only natural to place Checkers under the Hyperama management but the timing for the change is also right," Weyers said.
Hyperama's management would initially only be responsible for the buying function, administration and personnel management at Checkers outlets in the group's northern division.
Checkers outlets in the rest of the country would undergo merchandising and marketing strategy changes as soon as the northern division stores had been integrated into the Hyperama chain.
The Checkers brand name would not change.
Shoprite took over the troubled Checkers chain of 170 supermarkets in 1991, mainly to grow its market share and to spread its stores nationally. Until then, Shoprite was a Cape-based chain of about 75 supermarkets.
The two brands were merged despite the fact that Shoprite catered for the broad middle- to lower-income market while Checkers targeted the middle- to upper-income groups.
In recent full-year results to June, Shoprite posted better-than-expected numbers, lifting operating profit before exceptional items by 27 percent to R414,8 million while revenue rose by 6 percent to R19,6 billion.
The company's share price edged 8c higher on the JSE Securities Exchange yesterday to R6,19 against a 0,14 percent decline in the retail sector index.