Spar on-demand deliveries performing well

Spar has reported significant growth in its on-demand delivery service, Spar2U, a sign that it is catching up to other major South African platforms, such as Sixty60 and PnP asap!.

In its trading report for the six months ending 28 March 2025, the Spar Group’s South African business reported revenue of R49.9 billion, an increase of 1.7%.

It also noted that its earnings before interest, tax, depreciation and amortisation (EBITDA) sat at R1.1 billion, while operating profit for the period was R989 million.

The company said delivery volumes increased by 174% for its Spar2U platform, but did not provide a figure to support this.

It added that its partnership with Uber Eats, launched in the first quarter of 2025, has expanded to 130 stores.

The partnership allows Spar customers to order groceries via the Uber Eats platform, which the supermarket says “enables us to reach new customers with no physical footprint expansion.”

Spar2U’s growth is significantly higher than that of Shoprite’s Sixty60 platform. However, it entered the market much later and is likely growing off a much lower base.

Sixty60, the largest grocery delivery service in South Africa, reported a 47.1% increase in sales for the second half of 2024.

Similarly, PnP asap!, the second-biggest on-demand delivery platform in South Africa, saw sales increase by 42.5% for the 45 weeks ended 5 January 2025.

While Spar2U was founded in 2022, Sixty60 has been in operation since 2019, and Pick n Pay acquired delivery service Bottles in 2020, turning it into PnP asap!.

Shoprite has announced that its Sixty60 service is available at 601 locations, with 96 added in 2024. Similarly, Pick n Pay revealed that its platform operates out of about 500 stores.

Both Sixty60 and PnP asap! experienced growth similar to what Spar2U is seeing now when they began expanding their services.

Expansion challenges

The different levels of growth between Spar2U and Shoprite Sixty60 are also evident in the challenges each company faces.

Spar South Africa’s e-commerce operations manager, Dax Puttergill, recently told MyBroadband that adapting the company’s last-mile delivery model is challenging.

Puttergill said that while its model is similar to competing players in urban areas, rural areas and townships introduce complexities.

“In rural areas, road conditions can vary, and delivery distances tend to be much longer,” said Puttergill.

“This requires us to ensure that we consider factors such as delivery vehicle types and turnaround times.”

In township environments, the Spar must consider each community’s specific needs, such as safety, accessibility, and the lack of formal infrastructure.

Puttergill emphasised that these complexities haven’t become a hindering factor for the Spar2U on-demand delivery service.

“We are committed to the communities we serve, which means remaining agile, continuously refining our delivery models, and leveraging local knowledge to ensure Spar2U is accessible and efficient,” he said.

On the other hand, Shoprite told MyBroadband that its challenges involve refining its platform, meeting demand, and delivering on its promise of getting orders to the consumers in 60 minutes.

“Delivering on that commitment at scale is no small feat. Since launch, we’ve grown our product assortment from 500 to over 30,000 items while maintaining a fast, intuitive, and personalised shopping experience,” it stated.

“This has required constant refinement of our search algorithms, user experience (UX) design, and personalisation tools, allowing customers to easily re-order favourites or browse personalised recommendations.”

It added that offering hyper-accurate delivery windows for general merchandise categories can be particularly challenging. 

The platform recently expanded its product offering to include general merchandise.

“Unlike other players who promise a delivery day, we promise a delivery hour, made possible through bespoke route optimisation and demand forecasting software,” Shoprite stated.