SPAR International: global news in review

Date : 16 November 2017

We round up the latest news from SPAR International, bringing together news from leading markets in Africa, Asia and Europe.

SPAR South Africa reports annual results

SPAR has reported its final year results for operations in South Africa, Ireland and Switzerland.

South Africa revenue +4.6%, Tops alcohol driving sales

SPAR full year revenue in South Africa increased +4.6% to ZAR56 bn (US$4.5 bn), accounting for around 67% of the group’s total revenue.

Weakness in grocery sales were offset by the strong demand for alcohol. Tops alcohol turnover grew by +11.2%, making up around 10% of the retailer’s wholesale business. Without the liquor sales SPAR has underperformed compared to rivals Pick n Pay and Shoprite.

South Africa: a challenging economic and political environment

The South African economy has experienced a challenging year, as it entered recession for the first time in a decade. Shoppers have been under severe pressure which has hampered growth.

The expectation is that the political and economic uncertainties will continue. However, SPAR remains confident about the future. It will continue to invest in price and expanding its product range. The retailer also plans to open more convenience format Tops stores.

Ireland: ‘strong performance’, turnover of ZAR20.6bn (US$1.4bn)

SPAR South Africa also referenced ‘strong performance’ in its Ireland division, where it achieved a turnover of ZAR20.6bn (US$1.4bn), despite ‘deflationary pressures’ and ‘Brexit uncertainty’. Despite opening 73 new stores during the year, total store count at SPAR Ireland dropped by ten stores to 1,330 versus last year.

Ireland highlights: Gilletts Group, EUROSPAR upgrade, health campaign

Highlights during 2017 included growth ahead of forecast in Gilletts Group, which was acquired by Appleby Westward and continued investment, including the EUROSPAR upgrade programme.

Health was a key area of focus during the year, with SPAR Ireland launching its ‘Better Choices’ campaign in line with local consumer trends. It also developed ‘health on-the-go products including low fat, high protein and gluten free’ ranges in partnership with a qualified dietician.

Ireland outlook: 'uncertainty' but 'confident of delivering further strong results'

On the outlook for the future, SPAR noted ‘some caution due to regional economic uncertainty’, although it remained ‘confident of delivering further strong results’.

Switzerland: ‘early positive signs of turnaround’

Elsewhere, SPAR South Africa saw turnover of ZAR 10.4bn (US$722.2m), with a press release highlighting ‘Early positive signs of turnaround in Switzerland’.

Switzerland highlights: category management, new concept, losses turned around

Highlights during the year included category management, the roll out of a new generation concept and the financial performance in the second half, which saw losses in the first half turned around.

More work to do on forecourts and Italian speaking Switzerland

However, SPAR noted that progress on ‘opportunities in express and forecourts’ had been ‘slower than anticipated’, while it had also placed ‘domestic expansion opportunities in Italian speaking Switzerland’ on hold.

Sri Lanka: first store to open in 2018

In other news, SPAR South Africa is pursuing a joint venture opportunity in Sri Lanka, with the first store expected to open in 2018.

SPAR China launches first premium store

Elsewhere in the world, SPAR China opened its first premium store last month, focusing on being ‘green, environmentally-friendly and health-conscious’. It is located in Zhangjiakou, which is hosting the Winter Olympic Games in 2022.

The store, which offers 2,400 sq. m in selling space stocks over 6,000 products. Key categories include ‘the food-to-go section, in-store bakery and imported seafood and butchery sections’. The store also offers professional chefs, which focus on the delicatessen offer.

In the future, SPAR Fuxiang will continue investment in expansion, focusing on supermarkets and convenience stores, as well as upgrading existing stores. A press release referenced ambitions to open '12 new stores in the near future’.

Source: SPAR China

SPAR enters Pakistan

Elsewhere in Europe, SPAR is partnering with Burque Group to enter Pakistan, with an initial focus on Karachi, the country's largest city. The first store to open is a 1,000 sq.m supermarket, with a full fresh and ambient grocery offer.

A press release from SPAR International highlighted Burque group as 'one of Pakistan's largest sales management and distribution companies'.

SPAR International Managing Director Tobias Wasmuht said, 'The country is set to become one of the fastest growing retail markets in the world. With a population of over 200 million – two-thirds of whom are under the age of 30, with a quarter living in the top 20 cities – the SPAR model is tailor-made to respond to the growing demand from consumers for modern, world-class food retailing'.

SPAR Hungary launches 30-day lifestyle change mobile app...

Meanwhile, in Europe SPAR Hungary has ‘recently introduced its 30-day lifestyle change mobile app, helping those who wish to take steps to improve their health’. The app, which is free, has been developed in partnership with relevant professionals, including a dietary expert and nutritionist and personal trainers. It offers:

  • A specially created diet plan
  • Exclusive 20-25 minute exercise videos
  • Expert consultation
  • Fluid monitoring
  • The chance to win prizes
  • ‘Motivational texts and information about supplements, meditation, yoga, rehabilitation and office exercise videos’

The initiative has also been linked to SPAR’s promotional programme, with discounts available on associated products.

Source: SPAR International

Márk Maczelka, Head of Communications at SPAR Hungary said, ‘As a value-focused family enterprise, SPAR has always highlighted the importance of a healthy lifestyle. A balanced diet plays a much larger role in today’s busy world than ever before and as such, SPAR doesn’t only provide high quality food, but also aims to assist in maintaining a healthy diet’.

...As it introduces self checkouts

In other news, SPAR Hungary plans to roll out self checkouts to 24 large stores by the end of 2018, beginning with four stores this year. One store, which launched six self checkouts, in addition to its standard ones in late September is already seeing nearly 30% of shoppers use them.

Commenting on the development, Maczelka said, ‘For SPAR, development, the continuous modernization of the stores, the aesthetic, practical and demanding customer environment, and the widening of the range of services that are essential to facilitate convenient shopping, is crucial'.

SPAR Poland targets 400 stores by 2020…

Elsewhere in the region, SPAR Poland is targeting operating 400 stores by 2020, an increase of almost 60% from its current store count of 252 stores.

2017 has already been a successful year for the retailer, having already met its store opening target for the year. By the end of 2017, SPAR Poland will exceed revenue of PLN 1bn (€235.4m).

In 2018, SPAR hopes to reach 300 stores and grow revenue to PLN 1.3bn (€306m). Priorities will include convenience stores and small supermarkets, which will focus on fresh products and an increased range of food to go. SPAR will also optimise space in store, with the introduction of planograms. Premium ranges will also be a focus area.

…As it thinks local

In other news, SPAR Poland has launched a new campaign, ‘My neighbourhood, my SPAR’, emphasising local sourcing and that SPAR franchisees are local people.

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Source: SPAR Poland

 

SPAR Netherlands: Sjaak Kranendonk exits

Elsewhere, Sjaak Kranendonk is to exit SPAR Netherlands from the end of the year, replaced by John van der Ent as General Director.

Van der Ent has had a Dutch and international career, with experience from Macro, La Place and Etos, amongst others.
He will join Susanne Kroon (Commercial) and Edith Appels (Finance and Operations) as part of the management team of SPAR Holding BV.

Commenting on the announcement, Chairman of the Supervisory Board said, ‘Over the past 9 years Sjaak has transformed with the management team, the organization and the entrepreneurs SPAR from a traditional wholesale business in a modern retailer with its own place in the Dutch food retail world. The change in a shop focused on daily shopping has made SPAR a successful niche player and the company is financially very healthy'.

On van der Ent’s appointment, she continued, ‘John is a highly experienced retailer who has earned his track record, he is familiar with franchise organizations and is an entrepreneurial family, who will lead the further expansion and renewal of SPAR in the coming years’.

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