By Audrey d'Angelo

Cape Town - Woolworths opens the first pilot store of its iSentials venture here in the suburb of Parklands North today.

Stewart Matlala, the chief executive of iSentials, said the chain's target market of lower- to middle-income consumers made up 30 percent of the population and accounted for 26 percent of the total spend on food and household items. This rapidly growing market was expected to be worth R40 billion a year in a decade.

The new chain will compete head-on with Shoprite Checkers and Pick 'n Pay's franchised family stores.

The stores, to be situated in the heart of residential areas, will carry a limited range of between 700 and 1 000 high-demand items.

About 30 percent of the stock will be branded, while the rest, consisting of fresh produce, will be sourced directly from producers, cutting out the middleman . Matlala said the first five pilot iSentials stores would open in the Western Cape by the end of April. Stores in other provinces would start opening by June or July.

While stock would be sourced by Woolworths buyers and the pilot stores would be wholly owned and operated by Woolworths, it was envisaged that franchise stores would make up more than 80 percent of the chain, with an emphasis on black empowerment franchisees.

Woolworths shares rose 21c to R7.51 yesterday, more than double the 1.2 percent rise of the general retailers sector.