Source: Supermarket & Retailer
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.
Spar South Africa reported solid growth, with wholesale turnover increasing by 7.7% to R43.8 billion. Groupe 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.
A Spar in Durbanville, Cape Town, has elected to remove certain items from their shelves in a bit to support neighbouring small businesses during the Alert Level 4 lockdown.
As businesses struggle to survive due to the lockdown and employees around the country lose their jobs and endure pay cuts, Palm Grove Spar is playing its part by lightening the financial burden and uncertainty that comes with it.
The Spar’s owners released a statement on their Facebook page saying that:
- We will be closing our stationary section and asking that you instead support Hein and his team at PenCafe Stationers
- We will remove all Frozen Burger Patties from our shelf and ask that you support Werner and the RocoMamas team when deciding what burger to enjoy
“As owner-run businesses, we, now more than ever, need to support each other.”
By Lameez Omarjee for News24
An owner of eight Spar grocery stores has been ordered to pay over R11-million to staff for not complying with labour laws.
The Department of Employment and Labour on Monday issued a statement indicating that the Commission for Conciliation Mediation and Arbitration had granted it eight arbitration awards – against the owner, cited only as a “Mr. Giannacoupolous” in the department’s statement.
The CCMA’s decision comes following inspections at outlets conducted in May 2019 by the department, this after it had received a “series of complaints of alleged gross violations of labour laws”.
The Spar stores inspected were the Spar Orchards, Dely Road, Doornport Spar, Montana Spar, Wierda Spar, Silverton Spar, Zambezi Super Spar, Rietfontein Spar, Silverplace Spar and Safari Spar in Rustenburg. Collectively, the stores employ 565 workers.
“On investigation, all the stores which happened to be violating the labour laws were found to be owned by Mr Giannacoupolous. Ten stores were affected, with nine based in Gauteng and one in the North West,” the department said.
The issues raised in terms of violations to the labour laws include: failure to issue employment contracts, long working hours for staff without overtime compensation, pay for Sunday work and public holidays not granted according to the law, illegal deductions and complaints related to the hiring of illegal foreign nationals, according to the department.
In October last year Business Insider reported that the Spar head office had terminated the membership of the 23 stores which had fallen under the Giannacoupolous Group, with the intention to run them directly – as the group had brought the Spar brand into disrepute. A spokesperson of the Spar Group on Monday told Fin24 that the stores have since been returned to the Giannacouplous Group.
The Spar Group would not comment on the latest developments between the Department of Employment and Labour and the Giannacoupolous Group. The Spar Group is currently engaged in a legal battle with the Giannacoupolous Group, which is set down to be heard by the court in early March, making all matters between the two sub judice, the spokesperson said.
The Spar owner has to comply with the CCMA award within 14 days, or pay an amount with accrued interest.
Spar’s share price opened at R177.3 on Monday and was trading 2.26% lower at at R168.51 by 15:55.
South African consumers have hit hard times over the past few years as a creeping GDP growth, high unemployment and many political shocks continued to weigh on the economy.
In June, GDP data from Stats SA showed that South Africa has officially entered into a recession, with economists predicting tough times ahead for consumers, as more ratings downgrades are in the pipeline, which will ultimately put further pressure on the pocket.
One of the key components of South Africa’s slide into recession was a cut in consumer spending, in everything from recreation, clothing and transport, to even basic needs categories like food.
And South Africa’s biggest food retailers are feeling the pinch.
In April, Pick n Pay missed expectations for its full year earnings citing strained consumer spending as shoppers sought out cheaper options – which appeared to drive them to Shoprite’s doors, who reported a 14% growth in turnover in its latest financial year.
Woolworths, which has consistently positioned itself as a ‘premium’ food store, has seemed to weather the storm, with its latest results for FY2016 showing a 24% growth in profit from its food segment – which makes up 37% of the group’s total turnover.
A weakening economy and drought conditions hit South African food prices hard in 2016, with food inflation hitting close to 12% throughout the year. With a record yield from crops expected in 2017, some relief is on the cards – but the recession and other expected economic woes are likely to keep the pressure on consumers.
In the latest assessment of prices across South African retailers, we found that there has not been much a shift among South Africa’s food retailers.
When shopping for the BusinessTech basket of goods, Woolworths still checks out at the highest price – though it is apparent that, with the exception of Shoprite, competitors have struggled to keep prices low.
The BusinessTech Basket of Goods
For our basket, we look at some essential and non-essential food products. The basket contains 12 items, with store-brands priced for each item where available. The table below shows the pricing:
Prices were sourced in-store from stores around Centurion and cross-checked online, where applicable.Promotional prices, where marked, were not taken into account. Woolworths self-raising flour prices were determined on a per kg basis. In-store prices are subject to change depending on individual regions and promotions.
Prices have increased significantly in some cases, compared to the mid-2015 review. This is most notable in sugar and maize, which were impacted by drought conditions in the country during the interim period.
The most striking difference between the 2015 and 2017 reviews is that Pick n Pay, which was ranked as the cheapest basket in 2015, is now extremely close to being the second-most expensive, a few rands under Spar.
Checkers, which has positioned itself as the more affordable option, has lived up to that reputation, with many of its prices actually decreasing between 2015 and 2017.