Our value chain

PROCUREMENT

PROCUREMENT

OVER
5 000
SUPPLIERS AND
SERVICE PROVIDERS

OVER
1 300
SPAR BRANDED PRODUCTS


 

As a wholesaler and distributor, SPAR buys goods from suppliers and sells it on to our retailers at a margin. Procuring good quality products at great prices is therefore critical to our business model. We strive to supply competitively priced products to our SPAR customers, while ensuring profitability for SPAR and our independent retailers.

We negotiate the lowest possible prices from over 5 000 suppliers and service providers. The scale of our business allows us to give our suppliers sufficient volume so that they can plan and manage their operations to reduce their costs. Our scale also allows us to spread our fixed costs over substantial volumes, reducing our unit costs.

While certain products are sourced centrally, such as our SPAR branded products, much of our procurement happens at a distribution centre level, enabling local procurement, which in turn supports the local economy and decreases our impact on the environment. We endeavour to source local goods and support local industry wherever possible, while balancing consumer expectations of value, quality and price.

As a good corporate citizen, SPAR seeks to source products produced in a socially and environmentally responsible way. This in turn requires us to work in partnership with suppliers, to understand their business needs and risks, and to work to achieve shared goals. We partner with our suppliers on various sustainability initiatives, including packaging reduction and innovation, sustainable product development, and sustainable and transparent sourcing. See SPAR stakeholder initiatives section for more information on how we have assisted local farmers with training in sustainable farming methods.


PROCUREMENT


     

WAREHOUSING

WAREHOUSING

237 000 m2
TOTAL FLOOR AREA

577 000
AVERAGE NUMBER OF CASES DISPATCHED PER DAY


 

We have a combined 237 000 m2 of warehouse space, across various temperature disciplines, that we use to our full advantage. Our warehousing facilities are located at our seven distribution centres across the country.

Our world-class facilities are classified as such due to their efficient design, effective management and the innovative use of technology that enables the complex process of storing and packing massive volumes of goods for delivery.

We receive goods from our various suppliers, which are then unpacked into the relevant pick slots. We then process our retailers’ orders, most of which are received electronically, and through a voice picking system our pickers sort these orders for delivery. The pickers then pick the stock and deliver it into a holding area where it is wrapped and loaded onto the trucks. Although the process itself is relatively simple, the volumes being handled make efficiency and accuracy essential. On average, one distribution centre can handle upwards of 200 000 cases a day.


WAREHOUSING


     

DISTRIBUTION

PROCUREMENT

FLEET

307
TRUCKS

444
TRAILERS

84
RIGIDS

210. 8 MILLION
NUMBER OF CASES DISPATCHED


 

In a competitive market, we are actively working to drive lower transport and distribution costs. Our goal at all times is to make our system as efficient as possible to enhance our value proposition to our retailers.

In line with our strategic imperative of creating a sustainable business model, we have implemented measures that will potentially increase our bottom line and decrease our carbon footprint.

One such measure is the use of biodiesel in an increasing number of our trucks. We collect used cooking oil from our retailers, which is then converted into biodiesel. This has been successful in reducing transport-associated emissions, and has also resulted in financial savings with biodiesel being cheaper than conventional diesel.

SPAR has also seen the increasing opportunity of adopting new approaches to working with suppliers. Here the emphasis is placed on backhauling to increase the usage of vehicles and reduce operational costs. An identified inefficiency in our supply chain is that delivery trucks generally return to their point of origin empty. This involves fuel and labour inefficiencies that SPAR has sought to correct. Backhauling involves collaboration with our suppliers to deliver goods to our SPAR retailers on their return journey from our distribution centres. Alternatively, we deliver goods to retail stores near our suppliers, collect goods from the supplier and return to the distribution centre with a full truck.

The rising fuel price has resulted in a renewed focus on more effective route management systems, improving truck turnaround times, reviewing truck specifications and driver training in an effort to further improve transport costs.

As a result of these various initiatives we have seen significant advances in service level, reduction in running costs and CO2 emissions. During 2014, SPAR dispatched 210.8 million cases through the seven SPAR distribution centres which reflected a healthy 3.6% increase on the volumes handled last year.


PROCUREMENT


     

RETAIL SUPPORT

WAREHOUSING

993 030 m2
SPAR RETAIL SPACE

102 422 m2
TOPS RETAIL SPACE


 

Our business model depends on the success of our independent retailers. Simply put, if they do well, we do well. Our mission, therefore, is to ensure their success by supporting their journey on the road to the implementation of best practice in all areas of their operations.

The relationship that exists between SPAR and our retailers is incredibly dynamic, because the basis of the relationship is voluntary trading, i.e. mutual co-operation to the benefit of both parties. We cannot dictate to our retailers how they should run their stores, and nor do we want to, as this would take away from the flair and ownership that characterise the SPAR experience. We seek, rather, to work alongside our retailers, combining expertise to create the best stores possible.

A close working relationship is therefore essential in order to create extensive opportunities for engagement, discussion and support. Our retail operations departments in each distribution centre manage this relationship, take responsibility for SPAR sales into our stores and work to promote sales from these stores through various means. Our support services include assisting our retailers in making their stores as appealing as possible through design and revamp assistance, encouraging merchandising best practice, assisting with public relations activities and offering other training where necessary. Through the provision of a range of support initiatives, SPAR retailers are far better placed to compete effectively in a market that is dominated by supermarket chains, while still maintaining their independence.


WAREHOUSING