Spar2U sees explosive growth in on-demand deliveries

In its trading report for the six months ending March 28, 2025, The Spar Group’s South African business recorded revenue of R49.9 billion, a 1.7% increase. Earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at R1.1 billion, with an operating profit of R989 million for the period.

Spar announced a remarkable 174% increase in delivery volumes for Spar2U, although specific figures were not provided. The company also highlighted the expansion of its partnership with Uber Eats, launched in the first quarter of 2025, which now covers 130 stores. This collaboration allows Spar to reach new customers without needing physical store expansion.

While Spar2U’s growth is substantial, it entered the market much later than its rivals, likely growing from a smaller base. For context, Sixty60, South Africa’s largest grocery delivery service, reported a 47.1% increase in sales for the second half of 2024. Similarly, PnP asap!, the second-biggest platform, saw sales rise by 42.5% for the 45 weeks ending January 5, 2025.

Spar2U was founded in 2022, whereas Sixty60 has been operating since 2019, and PnP asap! originated from Pick n Pay’s acquisition of delivery service Bottles in 2020. Both Sixty60 and PnP asap! experienced similar rapid growth during their early expansion phases. Currently, Sixty60 operates from 601 locations, with 96 added in 2024, and PnP asap! operates out of approximately 500 stores.

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The differing stages of growth are also reflected in the unique operational challenges faced by each company. Dax Puttergill, Spar South Africa’s e-commerce operations manager, noted that adapting Spar’s last-mile delivery model is complex, especially in rural areas and townships. He explained that varied road conditions and longer delivery distances in rural areas necessitate careful consideration of vehicle types and turnaround times. In townships, Spar must account for specific community needs, including safety, accessibility, and informal infrastructure. Despite these complexities, Puttergill emphasized that they are not hindering Spar2U’s service, reaffirming a commitment to agile models and leveraging local knowledge to ensure accessibility and efficiency.

In contrast, Shoprite highlighted its challenges in refining the Sixty60 platform, meeting high demand, and consistently delivering on its 60-minute delivery promise. Shoprite stated that expanding its product assortment from 500 to over 30,000 items while maintaining a fast, intuitive, and personalized shopping experience has required constant refinement of search algorithms, user experience (UX) design, and personalization tools. The platform recently expanded its offerings to include general merchandise, noting that providing hyper-accurate delivery windows for these categories is particularly challenging. Shoprite proudly stated that, unlike competitors who promise a delivery day, they promise a delivery hour, made possible by bespoke route optimization and demand forecasting software.