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Operational overview

Financial performance is well ahead of expectations, from both a sales and profit perspective.

The acquisition of Gilletts has the added benefit of securing over a third of Appleby Westward’s wholesale turnover in a very competitive market. Read more about Ireland’s financial performance here.

SPAR and SPAR Express performed well in 2017, and remain the brand of choice for many independent retailers. The brand opened 26 new stores during the 2017 financial year. EUROSPAR faced a highly competitive, deflationary market in 2017, nevertheless it is showing strong growth. New business was a key driver of sales growth in 2017, with the opening of 3 new stores during the 2017 financial year.

We also made progress implementing EUROSPAR’s strategic objective to be ‘Famous for Fresh’, with 11 additional store refurbishments in 2017 providing the facilities required to manufacture and display the wide range of fresh foods that BWG Foods has developed. Further refurbishment is planned for EUROSPAR stores in the coming year. EUROSPAR increased its marketing activity in 2017, with price- and value-focused advertising during each promotional cycle and the launch of a ‘Defibrillator at every EUROSPAR’ campaign, which received strong retailer and local community endorsement.

MACE

MACE concluded a strategic review of the business in 2017, which was presented to retailers at the biannual MACE convention in May. New plans include three different formats, namely forecourt, neighbourhood and high-street convenience – MACE’s target formats for the next five years.

LONDIS

Londis’s performance is well ahead of expectations from an operational, sales and profit perspective. Under BWG Group ownership, the brand experienced the first like-for-like growth in ten years. Coffee, as well as the revamping of our foodservice offering, has played a major role in this growth. Londis also operates an effective recruitment and refurbishment strategy, with nine new stores opened and 32 stores remodelled during the 2017 financial year.

BWG GROUP

BWG Group operates a successful wholesale business through its Value Centre Cash and Carry branch network. During 2017, we completed the consolidation of three Value Centre branches onto a new site in Dundalk. BWG Foodservice continues to tender aggressively for new contracts across all industry sectors and had significant success in 2017 with new contract wins across the education, healthcare and foodservice sectors.

The programme of company-managed ATM roll-outs has proven to be a great financial success for the BWG Group and its retail customers. This is the first venture by SPAR Ireland into financial services. A total of 26 ATMs were rolled out in 2017, with a total of 6.2 million transactions completed. Our target is to add a further 75 ATM machines across BWG Group retail stores in 2018.

We enjoy a strong relationship with SPAR South Africa across a number of different operational platforms, with sharing of expertise and experience to the mutual benefit of the companies involved. Specific areas of collaboration during 2017 include supply chain and logistics management, IT, brand strategy, risk analysis and succession planning.

Store format performance summary 2017

SPAR’s implementation progress, risks and related opportunities in Ireland

SPAR Ireland has a continued focus on reductions in supply chain costs. BWG Foods delivers best-in-class service standards to retail of 99% in ambient grocery and alcohol and 98 % in chill within a pick-to-zero environment. Appleby Westward has maintained a service level of 98% consistently throughout the year, which compares extremely favourably with competitors. The continued expansion of milk supply via our depot has continued smoothly with 226 stores now buying via this route.

Supply chain and logistics expertise from South Africa has facilitated the improvement in service levels and cost-to-serve in both Appleby Westward and BWG Foods. There is ongoing sharing of knowledge in the planning and reconfiguring of the national distribution centre in Grange Castle, particularly around the chilled foods depot.

Transport costs have been reduced significantly year-on-year through consolidated deliveries to retailers and other supply chain initiatives introduced throughout the year. BWG Foods full year total cases shipped increased by 14%, and cost per case reduced by 2% over the same period.

BWG Foods made a significant investment in fresh food commodity pricing following successful tender operations. For the first time, the business was able to leverage the additional scale available after the Londis acquisition to secure better pricing on fresh commodities.

In response to cost of goods deflation driven by changes in the sterling/euro exchange rate, BWG Group and Appleby Westward introduced everyday low price strategies on best-selling lines, undertaking to match the most competitive pricing available from any wholesale competitor.

BWG Foods operates a formal ‘core range’ recommendation under the retailer benefit programme. This is now in its third year and continues to be a significant margin contributor for retailers. We also continued to focus on the ‘Famous For Fresh’ drive in our EUROSPAR stores.

Other own brand innovations under the SPAR brand include a range of new products to meet the changing needs of health-conscious consumers. Appleby Westward introduced a number of emerging categories like American sweets, ‘free from…’ foods and protein products, supported with planograms, information packs and discount schemes.

SPAR Ireland’s brand strategy, specifically the multi-brand retail strategy, has been refined in collaboration with SPAR South Africa.

There has been significant product innovation in fresh food categories under the BWG Group own-brands of Glenmor and Fresh Choice. Appleby Westward also continues to develop the Daily Deli concept.

We introduced retailer incentive programmes to drive house brand distribution. SPAR Ireland has ongoing loyalty schemes for SPAR, EUROSPAR and MACE. Londis also introduced a trial on ‘Customer Rewards’ which provides participating customers with exclusive in-store discounts and promotions which can be tailored by customer group or individual.

An upturn in retailer success, with improving arrears and lower bad debts, was a highlight, driven by cost of goods deflation, the development of the BWG Foodservice ‘Retailer Benefit Programme’ initiative, the everyday low price (EDLP) initiatives, new tender contracts in red meat and poultry and fruit and vegetables and larger retailer rebates.

Both BWG Group and Appleby Westward drove strong recruitment campaigns, with 73 new store openings. BWG Group retailers also won prestigious retail awards in 2017, including Top of the Tree, ShelfLife National C-Store Awards and XL Retailing Standards Awards.

We continue to recruit large numbers of stores each year and are also working to improve store standards and retail sales through investments in store developments and layouts, both in independent and company-owned sites.

BWG Foods launched a new e-commerce solution called ‘Shoplink’, which has now been deployed to all retailers. This new best-in-class solution is the platform that will deliver supply chain integration for customers across all sectors. Retailer feedback on the new system has been exceptional.

The Londis brand launched a new ‘Deli app’ which allows consumers to pre-order their deli sandwich or salad and then simply collect in store. If successful, this will be rolled out to a wider group of stores.

Strategic outcome

World-class replenishment system

SPAR’s implementation progress, risks and related opportunities in Ireland

SPAR Ireland has a continued focus on reductions in supply chain costs. BWG Foods delivers best-in-class service standards to retail of 99% in ambient grocery and alcohol and 98 % in chill within a pick-to-zero environment. Appleby Westward has maintained a service level of 98% consistently throughout the year, which compares extremely favourably with competitors. The continued expansion of milk supply via our depot has continued smoothly with 226 stores now buying via this route.

Supply chain and logistics expertise from South Africa has facilitated the improvement in service levels and cost-to-serve in both Appleby Westward and BWG Foods. There is ongoing sharing of knowledge in the planning and reconfiguring of the national distribution centre in Grange Castle, particularly around the chilled foods depot.

Transport costs have been reduced significantly year-on-year through consolidated deliveries to retailers and other supply chain initiatives introduced throughout the year. BWG Foods full year total cases shipped increased by 14%, and cost per case reduced by 2% over the same period.

Strategic outcome

Competitive pricing

SPAR’s implementation progress, risks and related opportunities in Ireland

BWG Foods made a significant investment in fresh food commodity pricing following successful tender operations. For the first time, the business was able to leverage the additional scale available after the Londis acquisition to secure better pricing on fresh commodities.

In response to cost of goods deflation driven by changes in the sterling/euro exchange rate, BWG Group and Appleby Westward introduced everyday low price strategies on best-selling lines, undertaking to match the most competitive pricing available from any wholesale competitor.

Strategic outcome

Comprehensive range

SPAR’s implementation progress, risks and related opportunities in Ireland

BWG Foods operates a formal ‘core range’ recommendation under the retailer benefit programme. This is now in its third year and continues to be a significant margin contributor for retailers. We also continued to focus on the ‘Famous For Fresh’ drive in our EUROSPAR stores.

Other own brand innovations under the SPAR brand include a range of new products to meet the changing needs of health-conscious consumers. Appleby Westward introduced a number of emerging categories like American sweets, ‘free from…’ foods and protein products, supported with planograms, information packs and discount schemes.

Strategic outcome

World-class brands

SPAR’s implementation progress, risks and related opportunities in Ireland

SPAR Ireland’s brand strategy, specifically the multi-brand retail strategy, has been refined in collaboration with SPAR South Africa.

There has been significant product innovation in fresh food categories under the BWG Group own-brands of Glenmor and Fresh Choice. Appleby Westward also continues to develop the Daily Deli concept.

We introduced retailer incentive programmes to drive house brand distribution. SPAR Ireland has ongoing loyalty schemes for SPAR, EUROSPAR and MACE. Londis also introduced a trial on ‘Customer Rewards’ which provides participating customers with exclusive in-store discounts and promotions which can be tailored by customer group or individual.

Strategic outcome

Best retailers

SPAR’s implementation progress, risks and related opportunities in Ireland

An upturn in retailer success, with improving arrears and lower bad debts, was a highlight, driven by cost of goods deflation, the development of the BWG Foodservice ‘Retailer Benefit Programme’ initiative, the everyday low price (EDLP) initiatives, new tender contracts in red meat and poultry and fruit and vegetables and larger retailer rebates.

Both BWG Group and Appleby Westward drove strong recruitment campaigns, with 73 new store openings. BWG Group retailers also won prestigious retail awards in 2017, including Top of the Tree, ShelfLife National C-Store Awards and XL Retailing Standards Awards.

Strategic outcome

New business growth

SPAR’s implementation progress, risks and related opportunities in Ireland

We continue to recruit large numbers of stores each year and are also working to improve store standards and retail sales through investments in store developments and layouts, both in independent and company-owned sites.

BWG Foods launched a new e-commerce solution called ‘Shoplink’, which has now been deployed to all retailers. This new best-in-class solution is the platform that will deliver supply chain integration for customers across all sectors. Retailer feedback on the new system has been exceptional.

The Londis brand launched a new ‘Deli app’ which allows consumers to pre-order their deli sandwich or salad and then simply collect in store. If successful, this will be rolled out to a wider group of stores.