Retail group Spar has warned of increased inflationary pressures in the coming months, with consumers expected to remain under financial strain as the cost of living increases.
In its interim financial results published on Wednesday (8 June), the group said it plans to address this by increasing its promotional calendar for the period ahead to continue to attract cash-strapped consumers.
The group is also planning to revamp its fresh food offering – including fresh produce, butchery, bakery and home meal replacement.
Liquor sales are also expected to rebound in the absence of further pandemic-related liquor trading restrictions, the group said.
Spar also plans to fully stake its claim in the online shopping space in the coming months as it ramps up the rollout of its new online shopping platform, SPAR2U. The e-commerce platform will deliver both groceries and liquor, with the service already being piloted in some stores.
“There is great enthusiasm from our independent retailers to implement SPAR’s new online shopping platform, SPAR2U. Our online platform is receiving positive reviews and a large number of stores are preparing to launch online within their communities in the coming months,” the group said.
SPAR2U launches in a crowded online same-day delivery space – with Pick n Pay, Woolworths and Checkers all offering same-day delivery services. Checkers’ Sixty60 one-hour on-demand grocery delivery service launched in late 2019, just prior to the onset of the Covid-19 pandemic in early 2020.
Pick n Pay acquired the Bottles app in October 2020, rebranding it to asap! in 2021. Woolworths launched its same-day service Woolies Dash in December 2020.
Financial results
Spar South Africa reported solid growth, with wholesale turnover increasing by 7.7% to R43.8 billion. Group operating profit increased to R1.83 billion (7.1%), while headline earnings per share increased to 642.6 cents (3.5%).
The core SPAR wholesale grocery business reported a meaningful recovery in sales growth of 4.6%, assisted by increased marketing initiatives at retail, and unrestricted liquor trading, which drove increased footfall to Spar stores.
Core business trading continued to be impacted by the stores which were closed due to the civil unrest in July 2021. At the end of the period, 13 Spar format stores and nine Tops at Spar stores remained closed.
Following the lifting of the Covid-19 nationwide liquor trading bans in September 2021, TOPS at SPAR made a strong recovery, increasing turnover by 41.6% for the period. On a combined basis, wholesale grocery and liquor turnover increased by 8.5% for the period.
