QUESTION ONE

Read the case study below and answer the questions that follow:

[100] [40]

We visited a Checkers some say threatens Woolworths - and found R36/kg chicken sharing an aisle with R1, 300/kg salmon

Phillip de Wet , Business Insider SA

There is fierce competition in the mid and lower range of grocery retail in South Africa.

Woolworths has mostly had its own way at the top of the market for a long time.

But Checkers is quietly rolling out the mood lighting and high-end products, and shoppers are starting to notice.

We visited one of the more recently opened flagship Checkers stores in Johannesburg, and found an astonishing mix of products.

Pick n Pay and the Shoprite group, which includes Checkers, are locked in a fierce fight for consumer spend as the South African economy stumbles along. Meanwhile the Botswana- based Choppies chain is infiltrating SA - in not-so-stealthy fashion these days - promising a whole new battle towards the bottom end of the grocery sector. But at the top end of the grocery spectrum, and in pre-prepared food in particular, Woolworths has stood largely alone, expanding its own reach with premium delivery.

Here and there, though, people are starting to talk about Checkers as a real contender to Woolworths for their middle class and up spending. And despite the fact that Checkers still has nowhere near the brand halo that Woolworths commands, some are even saying as

much in public. In an effort to get to the bottom of such reports, we visited the Checkers Hyper at the Mall of Africa just north of Johannesburg. Though the store has been open for some two years, it is still considered a company flagship.

Here's what we found.

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From the outside the Checkers Hyper in Mall of Africa seems pretty standard. Look closely and you may notice the pools of yellow-tinted light, rather than the harsh and pervasive fluorescent glare that characterises lower-end retail.

The buzz around the burger bar is the first heavy hint.

The claim that this Checkers is a local legend is, for once, not completely overblown - in part because of the prices. In a mall with five specialist hamburger sellers and two more chains famous for the burgers on their more mixed menus, the grocery store's burger bar

has a constant queue - because of the value it offers, shoppers say.

The range of ready-to-eat food gets a little ridiculous....

The hot-food buffet runs all day, and is aggressively staffed to keep lines short. Despite South Africa's recent experience with Listeriosis, the ready-to-eat meat range is extensive, and turnover is surprisingly high for a mid-range store lacking the brand image of, say, Woolworths, for food safety. And of course there is biltong. Lots of biltong. ... but not as ridiculous as the range of desserts, and enormous stretches of pastry shelves. Just in case you manage to avoid the other desserts, there is a crepes counter too - suspiciously at eye-level for a child. Particularly striking is the mixture of very high-end products right next to the really cheap stuff. You can find smoked Scottish salmon - at R1, 300 per kilogram..... immediately across the aisle from individually quick-frozen (IQF) chicken packs that come to a little under R35.60 per kilogram, even if 15% of what you're buying is brine. The same is true elsewhere in the store. Turn your back on the R372/kg "Banting Revolution" almond flour... and you are facing R8/kg maize meal. But just in case you forget that you are actually in an old-style grocery store, not some fancy food emporium, there is also a decent selection of motor oil.

Source: https://www.businessinsider.co.za/checkers-mall-of-africa-high-end-store-with-cheap- products-2018-8

1.1 Here and there, though, people are starting to talk about Checkers as a real contender to Woolworths for their middle class and up spending. And despite the fact that

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Checkers still has nowhere near the brand halo that Woolworths commands, some are even saying as much in public

With regards to the above extract from the article and using relevant examples from the article, examine how Checkers is positioning its stores and product offering to cater for the middle class and discuss whether this positioning is successful. (20)

1.2 Discuss the factors Checkers will need to take into account regarding perceived value pricing (10)

1.3 The claim that this Checkers is a local legend is, for once, not completely overblown in part because of the prices.

With regards to the above statement from the article and with the use of relevant research discuss the impact of country of origin effects on

Checkers.