Shoprite Holdings is in talks with Investec about a partnership that could grow the financial services it offers its millions of customers, according to people familiar with the matter.
The people asked not to be named because the talks are private. They said the discussions are still going on, and the shape of any deal is still being worked out.
They also said there is no certainty that the two companies will reach an agreement.
Shoprite declined to comment, Moneyweb reported. The retailer said news about any business partnership will be shared with the market when it becomes available. Investec also declined to comment, saying the bank does not comment on speculation.
A deal would help Shoprite move further into financial services without the retailer having to become a bank. According to the report, Investec could bring the technology and the knowledge of banking rules that Shoprite would need. It could also supply other licensed lending services.
Shoprite, Africa’s largest grocer, holds one of the biggest stores of shopper spending data in South Africa. It also has stores across the country. The report said this information on how customers shop could help build products such as rewards and payments.
Shoprite chief executive Pieter Engelbrecht has said many times that the group wants a bigger share of the money moving through its business. He has also said Shoprite has little interest in becoming a full lender.
“I am after the transaction,” Engelbrecht said in an interview on 1 September. “We are not bankers, we are retailers.”
“Full-fledged banking, I think, is better left to the bankers,” he said.
Shoprite has already taken steps in this direction. It bought a first 51% stake in R&A Cellular, a technology and payments company. Informal traders use its point-of-sale machines. That deal took effect in August.
The R&A Cellular purchase gives Shoprite another way to offer financial services to people.
The retailer also works with African Bank on some everyday banking services. These support its Money Market Account, which lets customers deposit and withdraw cash, send money and pay for goods. Shoprite has also been testing a Mastercard debit card linked to the account.
A deal with Investec could add more specialised banking and fintech skills to Shoprite’s plans. According to the report, this could let the group offer more than basic transaction services.
The talks come as large South African retailers, insurers, banks and mobile companies work more closely together to serve bigger groups of customers. Retailers have built up large amounts of customer data, trusted brands and wide store networks. The report said this puts them in a good place to sell a growing range of financial products made by banks and telecommunications companies.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.