Solid performance from Spar in challenging environment

Spar says despite difficulties, it expects another solid performance in the coming year. Image: Wikivillage

"Consumers were constrained by unemployment‚ restricted access to credit and rising costs. In emerging markets, increased strike action had a negative impact on disposable spend. The retail environment was competitive across all segments of the group's business with an aggressive pursuit for new retail sites‚" the retailer said.

Spar reported a 13.9% rise in diluted headline earnings a share to 650.4c for the year to September. Group turnover rose 9.8% to R47.4bn and after-tax profit increased 12.4% to R1.2bn.

During the period under review‚ Spar marked its 50th anniversary in SA.

"Spar has changed dramatically since 1963. Retail membership has grown from 500 stores under one format to 1‚817 stores under seven formats‚" the group said adding that the basic warehouses have been transformed into seven world-class distribution centres and its footprint has spread further into Africa.

Retail turnover for Spar stores increased 9.1% to R58.5bn‚ with wholesale turnover up 9.3% to R38.7bn. Retail trading space increased 2.2%‚ with 20 new Spar stores opened‚ taking the total number of stores to 873.

New outlets and stores

Spar says the stores in smaller towns such as Groot Brak are proving successful. Image:[[http://www. Wikivillage.com

Liquor division Tops extended its recent growth trajectory with retail sales increasing 15.9% to R5.8bn‚ while wholesale turnover grew 16.1% to R3.6bn.

The do-it-yourself and building chain Build It reported satisfactory results for the year‚ with retail turnover 12% to R8.3bn. Wholesale turnover was up 9.5%‚ to R5.1bn. Twenty new stores were opened‚ including one each in Mozambique and Botswana‚ bringing the total number of stores to 298.

The company opened 14 new Savemor stores during the year‚ and now has 28 of these stores catering for the needs of rural towns or the central business districts of larger towns that cannot justify the set-up costs of a Spar store.

The group said it continued to fine-tune the Pharmacy at Spar model and had rolled out 17 new stores during the year‚ giving it a total of 36 pharmacies in South Africa..

The group has also entered into an arrangement to pilot the Spar Express concept with Shell give Spar a presence on some garage forecourts. "Initial results from the first store in Wadeville have been positive and the pilot will be expanded during the coming financial year‚" the group said.

International experience suggests small-format stores often spur growth and most leading global retailers have a multichannel presence‚ including forecourt outlets. Locally‚ both Woolworths and Pick n Pay have agreements with petrol companies for forecourt stores.

Looking ahead‚ the group expected the trading environment to remain challenging with subdued economic growth and continued rand weakness.