New Sixty60 threat looms for Clicks and Dis-Chem

Sixty60 will allows Shoprite Group to compete with an uneven advantage. The runaway success of the Shoprite Group’s Sixty60 on-demand delivery service isn’t just upending the grocery retail market – the convenience, predictability and scale of the service means consumers are resetting their expectations for shopping online. Add to this the launch of the TakealotMORE and Amazon Prime subscription services, which both promise same-day delivery, and it’s clear the market has fundamentally changed. Shoprite Group has been unambiguous: Sixty60 is the “single consumer platform to enable one-hour delivery for all of the Group’s corporate banners”. Liquorshop has been part of the Sixty60 proposition since inception. General merchandise items from Checkers Hyper stores were added in 2024, and its specialist pet products (primarily food) from Petshop Science in 2025. Aside from the rollout of Sixty60 to select Shoprite locations (where it makes sense), it has not yet added Checkers Outdoor, Little Me or Medirite. However, work is clearly underway to add these banners to its platform … Image: Supplied Already some products from all three of these banners are available on Sixty60 given that they are ranged in Checkers Hyper stores. It is the last of these banners, Medirite, that surely offers the greatest potential. Medirite already operates from 118 in-store dispensaries and 22 standalone Medirite Plus pharmacies. Sales across the business unit are up 13.5% for the first six months of Shoprite’s financial year (July to December). Sales at standalone stores are up 73.5% in the period, albeit off a modest base. Sixty60 is Shoprite’s (not-so) secret weapon and allows the group to compete against the two established large pharmacy groups, Clicks and Dis-Chem, with an uneven advantage. The ‘location’ advantage Competition in the pharmacy market is restricted by the number of licences issued by government. However, Shoprite doesn’t need a footprint of 500 pharmacy counters or stores to compete effectively and efficiently with those larger rivals. Its last-mile logistics leadership means it can serve a larger area from a store than the natural physical catchment area of that store. Clicks, as an example, has 1 000 stores of which 800-plus are pharmacies. But it needs to keep extending this network to reach a greater proportion of the population. Even with this sizeable store base, it says 53.6% of households in South Africa live within 5km of a Clicks pharmacy. Dis-Chem has a smaller footprint of 316 stores, but its stores tend to be far larger than Clicks. In recent years, it has focused on adding smaller format stores to extend its reach into more markets and neighbourhoods. Shoprite therefore doesn’t need 500 or even 300 stores to compete with either Dis-Chem or Clicks. Whether the store is 5km or 10km away from a customer is no longer material. They can order their over-the-counter medication and have their prescriptions fulfilled on the app and it’ll be seamlessly delivered. The scale advantage Shoprite has a cost advantage too as it will be able to scale dispensing as it has with grocery picking. This means it should be able to dispense medication less expensively than these two larger players. Dis-Chem in particular is acutely aware of the cost to serve customers, with its ‘store of the future’ explicitly designed to reduce the amount of time it takes to serve a customer at the pharmacy counter, and therefore drive down costs. Together, the two major groups have a retail pharmacy market share of about 50%, with the rest comprised of independents and other smaller operators such as Medirite and Pharmacy at Spar (which has set its sights on doubling its network to 125 stores). Both are aware of the threat posed by non-traditional operators and are working to combat it. Dis-Chem sees its 60-minute DeliverD delivery service as key to this. Clicks lags in this area, with delivery (even to your nearest store) taking between one and three days. In its most recent annual report, it admits that “in particular, the group faces competition risk from the expansion of retail chains into healthcare and medicines, and from online retailers with their fast home delivery models”. To date, it has not articulated any plans to launch an on-demand offering. Shoprite will add Medirite to Sixty60 (possibly even soon). Once it does, Dis-Chem and Clicks will have to deal with a bigger headache than other retail groups rolling out physical pharmacies. This article was republished from Moneyweb. Read the original here.