Spar 'enhances' with branded pharmacy option

"Our key objective is to draw more people to Spar stores by increasing our offerings to include a pharmaceutical service," said Roelf Venter, group retail operations director for Spar.

Trends

Venter said that the group was responding to trends within the industry by expanding to include a pharmaceutical service.

"This has been an international trend for quite a while and we have since seen the trend penetrate the South African market as well. We have studied these trends quite closely and conducted our own research to make one hundred percent sure that such a move would be appropriate and beneficial to our retailers," he said.

The pharmacy at Spar Shelly Beach is a pilot project and if successful the concept will be rolled out to other Spar supermarkets countrywide. Spar is currently in the process of applying for additional licenses for other stores.

"As a retailer we have quite a vast footprint, so we're expanding to include an easy access option for our existing customers, and hopefully some new customers," Mike Prentice, group marketing executive told I-Net Bridge.

Enhancement, not takeover

When asked whether it was a good time to expand, considering that the pharmaceutical market is quite saturated, he said: "This is not an aggressive bid to take over the market. Spar is not going out to open hundreds of pharmacies. What we're doing is adding an enhancement to our current offerings."

Prentice said that Spar would open a "handful" of pharmacies. "We're looking to open in the region of about 10 pharmacies," he said.

The pharmacies will take either one of two formats. The first being an in-store pharmacy, which is located inside the actual Spar store, and the second is where the pharmacy will exist just outside the Spar supermarket, as with Tops, Spar's liquor division.

In terms of the operations of the pharmacies, Venter said retailers will be closely involved in this process, employing pharmacists and staff to run the division. He also added that "the concept is only available to existing Spar members."

Earnings

For the six months ended March 2010, Spar reported diluted headline earnings per share of 264.6 cents compared with 234.7 cents a year ago. The group reported at the interim stage that consumer spending remained under pressure and the food retail environment was extremely competitive with aggressive pricing and promotions, but its retail store turnover continued to grow ahead of the market.

Spar has 850 grocery stores, 448 liquor stores and 253 building material outlets in its group.