• SPAR reported an operating profit of R1.6 billion for the six months ending March 2024.
• The company has also reached an agreement to sell its SPAR Poland company to prospective buyer.
• SPAR2U is now available in 420 locations and saw sales volumes grow by 463 percent.

Last year was a rough one for SPAR, but the retailer appears to have rallied and spurred along some impressive growth in the six months ending March 2024.

In the results released today, SPAR Group reported that revenue from continuing operations had grown 7.9 percent to R77.2 billion. Operating profit for the six month period, while not at the levels it was in 2022, improved to R1.6 billion from R1.5 billion in 2023. The Group also reported that it has reached “salient terms” with a prospective buyer for SPAR Poland.

“We have made significant progress in respect of the priorities for the Group. This includes staying on track with our timeline to dispose of the Group’s interests in SPAR Poland and we expect to have finalised this process by September this year. We have been focused on achieving the best possible outcome for all stakeholders,” SPAR Group chief executive officer, Angelo Swartz said in a statement to the press.

“While the trading performance has been mixed, we are pleased to report that the Group delivered an increased operating profit of R1.6 billion for our continuing operations consisting of SPAR Southern Africa, BWG Group in Ireland and South West England, and SPAR Switzerland. The continuing operations generated cash of R1.4 billion for the period, an increase of more than 50% against the same period last year, with a reduction in net debt year-on-year,” the CEO added.

The average spend at SPAR also increased during the period by 5.8 percent at Supermarkets and 2.6 percent at TOPS at SPAR liquor stores.

“Although SPAR is a wholesale business, retail sales are a better representation for industry comparison than wholesale. A resilient retail performance is indicative of the strength and relevance of the SPAR brand, and we are confident that our retailers remain at the heart of the communities they serve,” Swartz said.

On that note, sales of from SPAR’s local private label business increase 7.6 percent thanks to the company’s willingness to amend its prices to match what consumers can spend.

Perhaps the most jaw-dropping figure from the results is the growth of SPAR2U, the retailer’s on-demand delivery platform. The Group reports that SPAR2U is now available at 420 sites up from 234 sites in March 2023. Thanks to this, one-demand sales volumes increased 463 percent in the reported period.

The company is righting the ship so to speak and it appears to be confident that the next six months will see further growth across the company, but it is also cautious about overpromising and under-delivering.

“The various cost saving initiatives and improved situation at the KZN region will improve profitability going forward. The operating environment in South Africa continues to be challenging. Inflation, prolonged high interest rates, muted GDP growth and high unemployment continue to place consumers under pressure. SPAR’s tiered private label approach is well placed to offer better value for all shopping budgets. Agreeing on the target operating model, improving profitability and finalising the system modernisation rollout plan are key focus areas for the months ahead,” the company told its shareholders.

Let’s hope that SPAR can continue to capitalise on the momentum it has built.