Food Lover’s Market kicks off R400m rollout plan with giant flagship in Cape Town

Food retailer, Food Lover’s Market (FLM), has embarked on an aggressive store rollout plan to expand its store footprint across the Southern African region as part of a R400-million investment.

FLM plans to open 22 new stores, including a flagship in Cape Town’s Bothasig, scheduled to open in October and is set to showcase what the stores in the pipeline would likely look. It plans to open the stores over a period of two years.

The retailer has invested R100-million into the Bothasig store build, which commenced in January. The store, spread across 3,000m2, is located off Bossmansdam Road land will be on a standalone site in an unkempt location with run-down buildings.

The “state of the art” FLM store will have an upmarket and family feel and will serve surrounding communities such as Bothasig, Monte Vista, Plattekloof, Panorama, Burgundy Estate, Richwood, and Edgemead.

The store will focus on creating a “theatre of foodusing animatronics in store, including fruit and veg animated characters, a boat, and seagulls by its Harbourside fresh seafood counter. It will also feature in store sound effects to create interest, FLM said.

Its in-store design features include wider aisles, with departments in dedicated destinations. The store will also boast a broader grocery section which will help it enhance its one-stop-shop concept. It will also make use of solar and energy-efficient lighting.

The store will feature an additional landscaped garden, a recreational seating area, and a Seattle Coffee Co at the entrance.

These are the departments planned for the store 

  • Fruit & veg
  • An extensive gourmet butchery with artisanal blockmen
  • Bakery
  • Fresh seafood department
  • Cheese and deli counters
  • Upmarket wine department
  • Hot foods with prepared foods like Crispy Chicken, Bubs Fish & Chips, and Pie O’My
  • The Fresh Society
  • Love Health and Health & Happiness dried fruit and nut bar
  • A Grab & Go selection of foods
  • Sushi and a Biltong Bar

Comment from Fitch Solutions on FLM’s expansion plans…

Following a R760m investment by private equity firm Actis, in December 2015, FLM has grown its store count to over 130, while also rolling out 230 Freshstop convenience stores at Caltex fuel garages across the country.

FLM has a strong value proposition and has targeted the aspirational middle-class (households with disposable incomes of more than $10,000) in South Africa through their ‘Theatre of Food’, by expanding away from being a traditional fruit and vegetable store, towards offering services such as a butchery, bakery, grocery and deli foods.

Food Lover’s Market competes in a highly competitive landscape within South Africa’s Mass Grocery Retail segment.

Shoprite Holdings-owned Checkers has been the most successful player, capturing the low- to middle-income-households group while still offering enough high-end, value-added services in their stores to attract higher-income households. Many Checkers stores already have Starbucks coffee shops in their stores and also offer deli’s, specialised meat, wine and cheese aisles and bakeries.

Similarly, Pick n Pay have also decided to segment their store offering. While these stores will still offer essentials and some bulk promotional offerings, the aim is to provide customers with a depth of range and value.

The third major competitor to FLM will be Woolworths which has shaped the high-end market and almost exclusively operates in that segment.

FLM is poised to offer a strong fresh produce range to their consumers. Fresh, locally sourced fruit and vegetables at affordable prices is the main differentiation points that FLM can look to exploit. Furthermore, offering a strong meat and poultry counter, as well as other consumer staples will help draw customers to their stores. As many consumers are still flexible with their store preferences and brand loyalty, the modern FLM stores will be new to many consumers and will perk their curiosity.

Promotions and special, something which FLM is known for, also serves as a strong selling point in a market which is set to take shape over the medium to longer term. A further downside to our forecast is the strength of FLM’s competitor’s food delivery service. Woolworths’ Dash, Pick n Pay’s ASAP and most notably Checkers Sixty60 have become popular since the Covid-19 pandemic and we expect these platforms to retain a strong level of market share.

Competitors also have well developed cash-back and rewards programmes, which retailers have successfully used to attract new customers and as a means of customer retention.

Lastly, the Pick n Pay, Woolworths and Checkers all have a far greater store count across South Africa. This means there is often one of these stores closer to customers than a Food Lover’s Market, and in an environment where time and price is of high priority for most consumers, FLM’s competitors are often closer in proximity to consumers.

Source: Business Insider SA, Fitch Solutions