Discovery Vitality has announced that Checkers will replace Pick n Pay as a partner from 1 September 2024.
Originally, it had announced that Vitality members would be able to choose separate in-store and delivery partners as a “response to shifting shopping habits” and that Checkers and its Sixty60 delivery service would be available later in the year.
ADVERTIsem*nT
CONTINUE READING BELOW
Read: Shoprite Group’s Checkers Sixty60 service surges 58%
It says 60% of Vitality members had different retailer preferences when they shopped in-store versus online. In other words, they shopped at Woolies stores but used Sixty60 deliveries for staples and other groceries.
It has now confirmed that Pick n Pay will cease to be a partner on 31 August (members will still be able to spend their Discovery Miles at Pick n Pay via the Vitality Mall). Woolworths remains a partner.
HealthyFood allows Vitality members to earn up to 25% back at their primary partner (and 10% at the secondary one) across all healthy items purchased (fruit, vegetables, lean meats, fat-free dairy, starchy foods, legumes, and healthy fats/oils). Discovery Bank customers with Vitality Money can earn up to an additional 50% back, equating to up to 75%.
Pick n Pay has been a partner since 2009.
The changes come as Pick n Pay is battling to turn around its core supermarket business, which is loss making and continues to lose market share.
Read:
Pick n Pay will shut one in 10 corporate supermarkets
Inside PnP’s plan for its 21 Hypermarkets
Tycoons ready to cede Pick n Pay voting power to lure investors
Pick n Pay sets out R4bn offerterms in retailer revamp
It was not clear in Discovery’s original announcement in September 2023 whether Pick n Pay would’ve continued as a partner alongside Checkers.
The Shoprite group, across its Shoprite, Checkers and Usave brands, has been growing its share of the market uninterrupted for 58 months (around five years).
The introduction of Checkers as a partner will help the group cement its hold (alongside Woolies) on the upper end of the market, which it has deliberately targeted since 2016 with the roll-out of its FreshX stores. At the end of December, it had a total of 104 stores trading in this format, which was about a third of its total footprint in South Africa.
Read: Shoprite delivers knockout half-year sales performance [Mar 2024]
Vitality members with Pick n Pay activated as a HealthyFood partner are likely already also shopping at Checkers. The change might not have a sizeable impact on Pick n Pay in the short term, but it’s going to make it even harder to get upper-income shoppers to consider, try or switch (back to) Pick n Pay once it fixes its underlying proposition.
More Vitality changes
ADVERTIsem*nT:
CONTINUE READING BELOW
In addition to these changes, Discovery has announced a further three.
- First, all Vitality members will be paid out their HealthyFood rewards in Discovery Miles (10 miles = R1) from 1 September (typically paid out in mid-October). Until now only those with Discovery Bank accounts got their cashback in the form of miles. This replaces the cash paid into non-bank clients’ accounts currently. It defends this change by saying it “receives many requests to create more Miles-earning opportunities”.
- It will also increase the cap on which HealthyFood rewards can be earned. For individual Vitality members, this is their first R2 000 of spend and for families, their first R4 000 of spend. From September, this will be upped to R2 500 of spend for individuals and R5 000 for families.
- Finally, the maximum boosted reward for Discovery Bank Black Suite clients will be cut from 75% to 50% (the same level as Platinum Suite currently) from September.
Pushing Purple
This means the only account holders who can earn the maximum 75% back on HealthyFood purchases are Purple Suite ones.
Discovery says this equates to an additional 12 500 Discovery Miles (= R1 250) per month. This is 150 000 miles a year.
A customer with Vitality Money, Vitality Health and Vitality Drive will typically get a 15% discount on purchases with their miles. On the 15th of each month, this is doubled to 30%.
Read:
Is it harder to get to Discovery Vitality ‘Diamond’ than before? [Jan 2023]
With 2024 changes, is it worth getting to Diamond on Vitality Health? [Oct 2023]
Is Discovery Vitality worth it? [Feb 2024]
This, Discovery says, means the 150 000 additional miles one is able to earn by maxing out the HealthyFood benefit on the Purple Suite (vs Black Suite) actually equates to R21 000, not R15 000.
Discovery appears to be using this change to incentivise Black Suite members to upgrade to Purple Suite for “only R110 more per month” plus an annual card fee of R3 500.
In communication, it argues that “the returns and additional benefits make it a worthwhile upgrade”.
Read: Mighty Checkers machine rollson, Sixty60 sales up 150% [Sep 2022]
Follow Moneyweb’s in-depth finance and business news on WhatsApp here.