Expansion into Switzerland lifts Spar
Group says the performance of Build It continues to defy pressure on consumer spending, with retail sales and same-store growth both increasing.Expansion into Switzerland helped grocery chain Spar grow revenue 24.5% to R92.2bn and attributable profit 27.7% to R1.8bn in the year to end-September, it reported.
Spar segments itself into three geographical regions.
Southern Africa contributed 67% of the group’s revenue and 80% of operating profit. Its store network in the region (including franchises) — which, besides its flagship grocery chain, includes Tops liquor outlets and the Build IT hardware chain — was 2,033 at September 30.
Ireland contributed 25% of revenue and 19% of operating profit. The acquisition of Londis helped its Irish division grow revenue 37%, and its store network stood at 1,340 outlets at the end of the reporting period.
The South African Spar group acquired 60% of its Swiss sister in April. Spar Switzerland contributed R6.5bn of the group’s revenue and R32m operating profit during the reporting period.
The total number of Spar-owned grocery stores in Southern Africa at September 30 was 890, five more than the previous year.
The group said the growth of Spar’s retail space slowed to 1.5% during the year.
"This was due to increased scrutiny to confirm the viability of all proposed expansion projects and a number of new developments being delayed by property developers. In line with its organic growth focus, Spar accelerated the pace of store refurbishments, with 167 stores being revamped from 159 stores the previous year," the company said in its results statement.
Despite delays in obtaining liquor licences, the group opened 45 new Tops outlets, taking the chain to 691 stores. The total retail space was up 9.3% for the period. The majority of stores were converted to the new Tops at Spar logo and 36 stores were revamped.
"The performance of Build It continues to defy ongoing pressure on consumer spending, with retail sales up 13.4% to R11.7bn and same-store growth of 7.4%," the company said.