Victory for SMEs as Shoprite to immediately stop enforcing exclusivity clause

CAPE TOWN – The commission on Monday welcomed the decision by the Competition Tribunal to confirm as an order the consent agreement, which states that exclusivity against other supermarkets will cease immediately in non-urban areas and will be phased out over five years in urban areas.

Shoprite Checkers will no longer enforce the exclusivity clauses contained in various lease agreements against small and medium-sized enterprises (SMEs) and specialist line stores with immediate effect, according to a consent agreement with the Competition Commission.

“In line with the recommendations of the Grocery Retail Market Inquiry (GRMI), Shoprite Checkers has, on behalf of its brands Shoprite, Checkers, and Usave, undertaken to waive exclusivity against small and independent grocery retailers and speciality stores in all shopping centres with immediate effect, the commission said in a statement.

Shoprite will also waive exclusivity against other supermarket chains in all non-urban shopping centres with immediate effect and phase out exclusivity over five years in urban areas. The phase-out will involve waiving exclusivity as leases come up for renewal and the retailer will not sign any new lease agreements that contain exclusivity clauses.

Competition Commissioner, Tembinkosi Bonakele said importantly, this undertaking also applied to Shoprite Checkers’ franchise business, OK Foods. Specifically, where Shoprite Checkers held the lease on behalf of a franchisee, the undertaking would be implemented immediately.