Spar shows growth despite challenging conditions
Retail group Spar showed a robust trading performance amid challenging economic headwinds, with turnover increasing by 7.8% for the 18 weeks that ended 28 January 2023.
In a trading update published on Tuesday (14 February), Spar SA noted a 7.4% increase in total sales over the 18-week period – which is only 0.8% less than the 8.2% increase over the corresponding period in 2022.
However, Spar’s wholesale grocery business reported sales growth of 9.7% compared to a 3.7% increase 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.
TOPS at Spar liquor also reported an increase of 1.6% for the period. While trading appears muted, the performance is against a high base effect seen in the prior comparative period (growth of 55.8%), which benefitted from the Covid-19 liquor trading restrictions being lifted in September 2021.
Comparing the last month of the period, January 2023, against January 2022, liquor turnover increased by 10%.
Despite the demand for building materials continuing to slow, Build it delivered a credible performance, albeit with sales declining by 2.8%.
The group is finalising its financial results for the Six months ending 31 March 2023, which will be published on Wednesday, 14 June 2023.
The table below shows the group’s turnover percentage over the 18 weeks ending January 2023 – including the corresponding period in 2022.
Spar noted the strong growth in its private label business under the Spar Encore banner and its delivery platform SPAR2U.
The retail group announced that the Competition Commission had approved the acquisition of the remaining 50% share in Spar Encore during the period, effective 1 April 2023.
“This will enable improved consolidation of the private label business, which continues to be an important driver of growth,” said Spar.
SPAR2U also continued to gain momentum amongst retailers 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.
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