Spar flourishes despite difficult circumstances

Spar demonstrated a strong commercial performance despite severe economic headwinds, with turnover growing by 7.8% during the 18 weeks ending 28 January 2023.

Spar SA reported a 7.4% growth in total sales for the 18-week period in a trading update issued on Tuesday (14 February), which is just 0.8% less than the 8.2% increase over the same period in 2022.

Spar’s wholesale grocery sector, on the other hand, increased revenues by 9.7% in 2022, compared to a 3.7% gain in 2022.

“This performance is encouraging as this is reported against internally measured price inflation of 9.9%, with a solid performance across both dry and perishable groceries,” said the group.

Spar liquor also recorded a 1.6% gain during the period. While trading looks to be subdued, the result compares to a high base effect recorded in the preceding comparative quarter (increase of 55.8%), which benefited from the lifting of the Covid-19 liquor trading limitations in September 2021.

Liquor turnover grew by 10% when comparing the last month of the period, January 2023, to January 2022.

Despite continued slowing demand for building supplies, Build it maintained a reasonable result, although with sales dropping by 2.8%.

The group is nearing completion of its financial statements for the six months ending March 31, 2023, which will be released on Wednesday, June 14, 2023.

The table below displays the group’s turnover % for the 18 weeks ending January 2023, including the same period in 2022.

Spar observed significant development in its private label operations under the Spar Encore moniker, as well as its delivery platform SPAR2U.

The retail giant said that the Competition Commission has allowed the purchase of the remaining 50% stake in Spar Encore throughout the term, which will begin on April 1, 2023.

“This will enable improved consolidation of the private label business, which continues to be an important driver of growth,” said Spar.

SPAR2U has also gained traction with shops and customers.

“Having launched its pilot phase during the prior comparative period, SPAR2U ramped up its availability to 201 sites at the end of the period, and consumer feedback has been extremely positive,” said the group.

“The business has made good progress with its accelerated growth plan, but it continues to be impacted by fuel, energy and other inflationary cost pressures.

“However, this performance is encouraging amid challenging trading conditions, and the group has benefitted from installing solar plants across all its distribution centres,” added Spar SA.