“Our strategic focus remains on supporting our retailers by leveraging our key competencies in supply chain optimisation and retailer support through our seven distribution centres.”
“The value of strong governance was evident during the year in the deliberations preceding the BWG transaction. The board engaged in rigorous discussions to ensure a deep understanding of the impact on all stakeholders.”
Last year the SPAR Group celebrated 50 years of retailing in South Africa. A year later, the same group is entering global retailing with a transaction that is fundamentally changing the way we think about our business. As the board and executive management, we firmly believe that we are now in a very strong position to deliver on aggressive growth targets.
The SPAR Group turnover grew 15% to R55 billion and operating profit increased to R1 867 million, which includes two months of contribution from BWG.
Considering the South African operations only, we have seen sound performance against a backdrop of sustained weakness in the global economy and a domestic environment characterised by labour unrest and high levels of consumer debt.
Our growth has been predominantly organic, with a lower number of retail stores opened than in past years (102 compared to 118 in 2013). Despite this, we remain firmly committed to our business model, which is grounded in the independence of our retail members. The SPAR Group is not a traditional retailer which would at times cannibalise own stores in a fiercely competitive market.
We grow with our retailers in a sustainable and responsible way.
We remain committed to growing our food retailing footprint in sub-Saharan Africa, where we already support 153 stores.
A SUSTAINABLE STAKEHOLDER APPROACH
Our strategic focus remains on supporting our retailers by leveraging our key competencies in supply chain optimisation and retailer support through our seven distribution centres. However, attracting new retailers remains a challenge. Although the retail sector continues to create employment, it is challenging to attract and secure new entrepreneurs.
In the same way, we are committed to grow small farmers in South Africa. Groundbreaking progress has been made in our stakeholder engagement activities during the past year to take this to a new level. The SPAR Group is driving these initiatives, not from a compliance approach but because we firmly believe in the need for long-term sustainability. The board regards this as core to its ethical leadership. In this regard, we engaged in the process that resulted in a reviewed set of values for the entire group during the past year.
We are committed to show passion, live family values and encourage entrepreneurship in our leadership and decision-making on behalf of the group.
We are also proud of the fact that the SPAR Group has been certified as a Top Employer in South Africa for 2014.
The ability of our industry to continue creating value relies on a healthy relationship between business and government and our combined effort to attract investment. This remains a challenge.
GOOD GOVERNANCE AND MANAGEMENT
The value of strong governance was evident during the year in the deliberations preceding the BWG transaction. I am pleased to say that the board engaged in rigorous discussion to ensure a deep understanding of the impact on all stakeholders – in South Africa as well as Ireland and South West England.
We shall continue to deepen and expand the necessary structures to support the good governance of the new group going forward.
A board evaluation was again completed during the year. We have been using the same system for several years and I am dedicated to personally provide one-on-one feedback to each of our directors to ensure that we operate optimally as a diverse and experienced group of leaders.
The board is particularly cognisant and appreciative of the role that the managing directors of the group’s distribution centres play in managing operations on a daily basis. Their commitment, deep understanding of retail and enduring relationships sustain all aspects of the business. We are particularly supportive of their efforts to address social and environmental issues in their direct communities and operations.
During 2014 the board was also involved in a seamless handover between previous CEO Wayne Hook and incoming CEO Graham O’Connor. We are pleased that we were able to retain Wayne’s experience of 29 years in his new role as an executive director responsible for business development.
Graham has brought a new perspective and momentum to the executive team, of which the Ireland transaction is but one example. We continue to fully support him in directing and managing a group that is now facing many more opportunities from a more diversified – and potentially more complex – base.
11 November 2014
On behalf of the board, I invite you to attend the Annual General Meeting of the SPAR Group Limited to be held at 09h00 in the company’s boardroom, 22 Chancery Lane, Pinetown on Friday, 13 February 2015.
11 November 2014