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Spar says SA cigarette sales have not recovered since ban

| Retailer trading results

The JSE-listed retailer Spar, which has stores in Southern Africa, Switzerland, Poland and Ireland, has seen a 7.5% increase in turnover to more than R64 billion in the six months to end-March, with operating growth up 28% to R1.7 billion.

| Fin24

This is thanks to strong sales in Switzerland and Ireland, with only 3% turnover growth from Southern Africa, which is dominated by South Africa. Grocery sales grew by only 0.8%, and renewed alcohol bans cost its TOPS at Spar unit 72 trading days. Wholesale liquor sales declined by almost 8%. Spar says cigarette sales have not seen "any meaningful recovery" since previous sales bans were lifted. Cigarette sales were down 13% compared to a year before.

Tobacco sales were prohibited between the end of March and mid-August last year, as part of South Africa's hard lockdown to curb the spread of Covid-19. 

But Spar’s Build It business flourished, as the South African home improvement boom continued. Sales of building materials rose by a "remarkable" 26%, the company said.

BWG Foods (Ireland and South West England) saw turnover growth of 13% in rand, (3.3% in euro). Consumers supported their local community stores during the extended lockdown while Ireland experienced its third wave of the pandemic, Spar says. Spar Ireland now has 1 392 stores.

Spar Switzerland reported an increase in turnover of 22% in rand (11% in Swiss francs). Neighbourhood Spar shops have benefitted from consumers choosing to shop locally rather than at the large malls. Spar bought Store Service AG (SSAG), which owns 60 convenience shops at petrol stations, earlier this year, increasing its total store network to 388 stores. 

Spar Poland reported turnover growth of 32% (27% in Polish zloty), despite the closure of its stores in malls due to a local lockdown. 

Spar declared an interim dividend of 280c, from 200c in the same period in the previous year.

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