Spar Group registers single digit growth in revenue supported by home market

SOUTH AFRICA – Spar Group, South African retailer with operations abroad, has reported 5.2% rise in turnover to R67.6 billion (US$4.4 billion), supported by strong performance from home markets with 34.0% of total reported revenue generated in foreign currency by BWG Group with operations in Ireland and South West England, Switzerland and Poland.

SPAR South Africa reported wholesale turnover growth of 7.7% to R43.8 billion (US$2.85 billion), supported by a return to normal trading hours for the liquor business TOPs, which helped increase footfall to SPAR grocery stores.

The core SPAR grocery business reported turnover growth of 4.6%, demonstrating a meaningful improvement.

As concerns around COVID-19 have eased, consumers have largely returned to normal daily activities and pre-COVID-19 convenience-based shopping habits. SPAR has also seen an uptick in trading in its coastal regions, predominantly driven by greater flexibility in terms of remote working behaviour post the pandemic.

Turnover during the period was slightly impacted by stores that were damaged and have remained closed due to the civil unrest.

A total of 22 SPAR and TOPS stores remained closed at period end. The group continues to work closely with the affected retailers to open these remaining stores as soon as possible.

Turnover growth for its other local brand SPAR Encore was impacted by the civil unrest in July 2021, which caused extensive damage to the factories of certain private-label suppliers, including SPAR’s largest supplier of SPAR-branded cold meats.  This severely impacted private label growth for this category with revenue rising by 4.1%, representing 16.5% of core turnover.

Growth of house brands continues to outperform the growth for the core business as turnover of the latter increased by 5.3% to R8.1 billion (US$527.25m), representing 24.3% of core SPAR turnover.

Meanwhile, TOPS liquor sales saw considerable growth with wholesale liquor turnover subsequently increasing by 41.6% for the period to R5.4 billion (US$351.5m).

Shifting focus to abroad, BWG Group, Irish wholesaler and retail grocery franchise operator, delivered excellent turnover growth of 8.3% in EUR-denominated terms and 2.9% to R14.9 billion (US$969.8m).

SPAR Switzerland reported a decrease in turnover of 1.6% in CHF-denominated currency and f 2.8% to R6.9 billion (US$449m).

As expected, the elimination of pandemic-related restrictions in the current period significantly reduced the level of neighbourhood store support which the business benefitted from during the height of COVID-19 restrictions

Spar Poland on the other hand delivered turnover growth of 6.5% in PLN denominated currency.

In the prior period, SPAR Switzerland acquired SSAG, the operator of 60 petro-convenience stores located on Avia fuel courts.

The rebranding of these stores to SPAR Express stores continues, with approximately a third of the stores yet to be converted at period end. These stores are in the process of being transferred to independent retailers.

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