Investment case

Since listing on the JSE in 2004, the SPAR Group has shown solid growth in earnings, dividends, number of stores and retail selling area.

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The core elements of the SPAR Group’s unique competitive advantages are:

CENTRALISED PROCUREMENT, WAREHOUSING AND DISTRIBUTION

This provides the benefit of economies of scale and procurement power to the independent retailer. It gives collective responsibility to security of supply and the mitigation of risk in the supply chain.
The SPAR business model allows independent retailers the freedom to source locally and regionally to best fit their unique consumer profile and requirements.

SUPPLY CHAIN EFFICIENCIES

Voluntary trading, by its nature, requires an efficient supply chain. Parties to the agreement are committed to the principle of vertical co-ordination and mutually beneficial initiatives (promotions, packaging, logistics, innovation and category development).
The system further offers reduced administration time and costs as retailers process a single invoice and receive a single delivery in contrast to the complexities created by independent sourcing and logistics. These factors contribute to a competitive price offering to the customer.

MARKETING SUPPORT

The SPAR brand is strengthened by national and regional campaigns and strategic sponsorships, funded by the SPAR and Build it Guilds and the SPAR Group. These campaigns are supported by promotions and communication strategies through a wide spread of media channels.

INFORMATION SHARING NETWORK

All SPAR International members meet regularly to share brand, marketing, logistics and operational expertise and best practice. This will be further enhanced by benchmarking opportunities between the South African and Irish operations.
Locally – Information sharing enables optimised planning, procurement and new product development between SPAR and retailers and between SPAR and major suppliers.

GEOGRAPHICAL FOOTPRINT

With more than 1 864 stores in Southern Africa, SPAR has a strong presence, especially in urban residential areas (nearly twice as many stores as the closest competitor). The group also has a strong focus on new business development in Africa.
The group now has a significantly expanded footprint through a new range of store formats in Ireland and the South West of England. This will be expanded through a dedicated internally funded capital investment programme over the next five years.

STORE OWNERSHIP AND FOCUS

SPAR stores are predominantly ownermanaged. Owners are entrepreneurial in their approach and have a vested interest in the success of their store.
See Retail support section for information on the support given to our independent retailers.

FRESH COMBINED WITH SERVICE

We target 30% of a SPAR store’s turnover to be generated by fresh produce, butchery and bakery food service departments. These typically have higher gross margins and are growing due to consumer demand for convenient fresh products.

MARKET POSITIONING

SPAR’s market is spread across all LSM groups. The store formats, fresh approach and competitive, responsible pricing strategies for the different formats ensure a spread that mitigates the risks associated with particular market segments.