Our material relationships
Who they are
In South Africa, SPAR’s approach is to source from local suppliers with a strong commitment to supplier development in our SPAR brands.
Our rural hubs are examples of how we enable authentic shared value creation with emerging suppliers over the long term. We provide our suppliers with a growing market for their products, which ensures that their businesses can be viable and sustainable.
multinational, SMME and individual trade suppliers
in South Africa
of overall stock supplied by our top 20 suppliers
in South Africa
How we engage with our suppliers
Creating authentic shared value for suppliers
SPAR’s operating model in all territories relies on an efficient supply chain and robust relationships with suppliers to ensure an appealing value proposition for retailers at acceptable wholesale margins.
The scale of our logistics and distribution systems provides suppliers with substantial volumes at reduced operating costs. The high volumes handled at our distribution centres ensure a spread of fixed costs that translates into reduced unit costs.
Joint business planning with our suppliers encourages vertical co-ordination and efficiency, and we have identified a number of cost-reduction opportunities. These include, for example, backhauling and one-way loads, optimal buying configurations and supply chain mapping. We are also increasingly focusing on trade marketing with marketing volume and value tracked against a scorecard which is reviewed at the biannual joint meetings.
Backhauling and one-way loads require collaboration with suppliers to deliver goods to retailers on their return journey from our South African as well as cross-border distribution centres, where possible. We also deliver goods to retailers near our suppliers, then collect goods from suppliers, and return to the distribution centre with a full truck. These initiatives reduce the unnecessary labour and fuel costs associated with delivery trucks returning to their point of origin empty. Optimised supplier fleet utilisation furthermore results in a reduction in our carbon footprint.
In Switzerland, we are currently rolling out a central billing and dropshipment network that will have a positive impact on small to medium suppliers as they will now be able to participate in an expanded retail network. We are also setting up the first joint business planning sessions with major suppliers to focus on opportunities that we can explore together. Another first for Switzerland was a recent meeting with 200 suppliers where SPAR management shared their new strategy with them – an initiative that was very positively received.
Supply chain mapping makes use of our cost-to-serve modelling tool and enables us to work with our suppliers to optimise the most effective route to market. These initiatives result in increased efficiencies and shared savings for our suppliers and the group. By stripping unnecessary costs from our supply chain, we are further able to pass the cost-saving benefit on to our retailers.
Most of our procurement happens at distribution centre level, while certain products are sourced from local suppliers at store level. This enables sourcing that is in support of local enterprise. We work with suppliers to encourage sustainable product development and transparent sourcing. Our emerging farmer development programme assists vertical co-ordination between commercial and community farmers to the benefit of the surrounding rural economies.
This year, BWG Foods hosted the largest trade show event in Ireland involving more than 2 000 suppliers. This serves as a communications platform for our BWG Group CEO to engage with about 250 people from our suppliers’ leadership teams.
Our suppliers and sustainability
During the 2017 financial year, we started formal engagement with our house brand suppliers on a range of sustainability matters.
All suppliers were asked to complete a questionnaire concerning their environmental management systems, specifically focusing on energy use, transport, greenhouse gasses, waste and waste water, water use, emissions, pollution prevention and treatment of hazardous substances.
The scope included operations and potential environmental impacts and whether they offer training to their employees on these matters. This allows us to compare sustainability indicators across suppliers.
The feedback, which encompassed 60% of our house brand suppliers, enabled us to start gauging the maturity of their approach and understand what is currently being measured. This, in turn, reflects the extent to which they are geared for the future and for the longevity of their business. Our engagement further included site visits during which suppliers shared further information that provided us with the opportunity to build on our relationship and increase awareness of our collective environmental responsibilities.
Our next step is to start gathering and consolidating data, while also assessing risks per site. Ultimately, we would like to drive and demonstrate improvement throughout the supply chain, thereby progressing from basic compliance to industry-leading performance. Our aim is to contribute to efficiency improvements and ensure that our suppliers are sustainable and secure.
Our flagship emerging farmer development programme
SPAR is driving a model of localised sourcing of fresh produce by improving its fresh supply chain in rural areas. The inclusion of emerging smallholder farmers reduces transport costs, improves lead times and increases freshness and shelf-life. These farmers are mentored by commercial farmers and technical service providers in terms of farming techniques, spraying, harvesting and regulations, and are assessed against the localg.a.p. farming standard.
SPAR’s flagship enterprise development programme, which aims to establish three sustainable, commercial rural food hubs, continues to make significant progress.
SPAR recognises the vital role played by emerging smallholder farmers in supporting job creation and food security through their participation in the rural food supply chain. This is similarly reflected in the goals set out in the National Development Plan, which states that agriculture – as the primary activity in rural areas – has the potential to create one million new jobs by 2030, with the majority based in the smallholder farmer segment. To this end, the group initiated an emerging farmer development programme in 2014.
The programme involves the launch of three rural hubs in South Africa, with each hub consisting of a packhouse. Each packhouse works much like a mini distribution centre, to which local farmers bring their produce. The produce is then distributed to stores within a 200 km radius. SPAR has committed to funding the capital and operational expenditure as well as the associated logistics infrastructure required for the development of the three initial packhouses.
The success of the model requires the support of a range of stakeholders, including farmers, communities, government, food manufacturers and wholesalers, retailers, financial institutions and funders. Following extensive planning and collaboration, the first rural hub was opened in Ofcolaco, Mopani, Limpopo, in June 2016.
With the assistance of a non-profit organisation specialising in emerging farmer development, five emerging smallholder farmers were selected to participate in the initial planting of the first produce crops (which, in this instance, is butternut, peppers, beans and cabbage). This non-profit organisation has been selected as the technical services provider for the duration of the programme, and lends comprehensive, on-the-ground support to the smallholder farmers. Moreover, a commercial farmer mentor was appointed, thereby providing a critical link between the rural and commercial supply chains.
The five farmers involved have received localg.a.p. training as a stepping stone to achieving GLOBALG.A.P. certification – an internationally recognised standard for good agricultural practice (G.A.P.) and farm production that ensures safe and sustainable agriculture.
To ensure the commercial viability of the project, SPAR has been working closely with the Mopani hub team to monitor local pricing trends. A study into the structure of the packhouse value chain, so as to enable price and cost comparisons, identified opportunities for cost reduction.
By September 2017, five emerging farmers were supplying produce to 10 SPAR retailers. Excess produce is sold to food processors.
A permanent packhouse has been operational since August 2017. During 2017, SPAR contributed a full mechanisation plan, the purchase of two delivery vehicles and refrigeration upgrade for the packhouse facility in Ofcolaco.
The second hub, which commenced operations in October 2017, is in Mpumalanga and a decision on the third should soon be finalised. The aim is to have all up and running by December 2018, with 100 trained smallholder farmers supplying them regularly. Each hub will be supplied by a group of about 30 farmers with about 1 000 tonnes of produce a year.
The hubs are based on a shared ownership structure. In addition to economic empowerment and job creation, the programme also increases food security – particularly in the lower -income groups – by improving access to diverse, fresh and nutritious produce. Comprehensive nutrition diversity research has been commissioned by SPAR to identify baseline nutrition intake in rural areas.
Challenges for the project included selecting the correct product mix and in forecasting appropriate planting schedules to ensure offtake, as well as in negotiating a suitable price that would entice retailers, while guaranteeing the farmers a profit.
Watch this video to find out more out our emerging farmer development programme.
Food safety focus
As a South African retailer and member of the consumer goods council, SPAR has adopted the Global Food Safety Initiative (GFSI) assessment, which provides a global benchmark for advancing food safety. This means that we require all our suppliers to comply with these standards and, eventually, to be GFSI certified as this will ensure common standards for the production and trading of food products in the group.
Our role is to support suppliers and enable capacity building. Our chosen direction is based on audits done at suppliers, with the emphasis on house brand suppliers who are required to achieve GFSI certification by 2019.
Our commitment to ethical supply chain development
SPAR continues to engage with non-profit organisations, suppliers and activist groups to plan our approach to dealing with any unethical practices currently being carried out in our supply chain. SPAR understands the difficulties in addressing these issues and is committed to actively drive education in the supply chain towards understanding the need for change. In particular, SPAR takes these considerations into account when designing enterprise development businesses that become part of our supply chain, thereby ensuring that developments are based on our ethical principles.
SPAR and WWF-SASSI
SPAR is a co-signatory to industry and government bodies on issues relating to fishery improvements, and is aligning all SPAR seafood procurement to be within the parameters of the World Wide Fund for Nature (WWF) Southern African Sustainable Seafood Initiative (SASSI) guidelines on how seafood should be caught and sold.
SPAR offers an extensive house- and supplier -branded seafood range. However, the Southern African seafood industry faces a number of sustainability-related issues that go well beyond competition in the marketplace.
These concerns include illegal harvesting or poaching and the over-exploitation of marine resources. SPAR is committed to collaborating with WWF-SASSI to overcome these challenges and guard the sustainability of seafood resources.
SPAR joined the WWF-SASSI Retailer/Supplier Participation Scheme in December 2010. Since then, we have completed an assessment of the SPAR house brand seafood range demonstrating that all SPAR house brand seafood procurement is taking place according to our formal sustainable sourcing policy.
We created internal awareness of the WWF-SASSI and SPAR commitments, and generated external awareness through the guilds. We provided real-time access to seafood data by linking WWF-SASSI and suppliers to SPAR’s online portals. Through working closely with suppliers, we have been able to establish full traceability of SPAR -branded seafood products. This included random DNA testing on SPAR -branded seafood products to ensure correct identification and labelling.
From 2017, we have expanded this initiative beyond SPAR house brand products to all seafood and fish in our supply chain. We are currently engaging with SPAR’s top seafood suppliers who supply directly to the distribution centres. Each supplier was assessed as per the standards stated in the SPAR brand procurement policy. We also focused on training buyers at the distribution centres and gathering seafood information from all seafood suppliers to assess whether any species were red listed. Work was also done to assist retailers that sourced their own seafood and a pilot project was launched with Fish4Africa, which supplied fish directly to SPAR stores.
Strategic risks relating to suppliers
- Transformation issues – including, for example, management, ownership, supply chain and enterprise development – can impact the business negatively
Who they are
SPAR is built on strong relationships between all stakeholders, which hinge on our employees and their ability to forge, maintain and serve these relationships.
We therefore aim to develop leaders and employees who deliver excellent service within the parameters of a lean business model that directs decision-making at the right levels.
employees across our corporate offices and distribution centres in South Africa, Ireland and Switzerland
of our employees in South Africa are male due to the nature of work done at our distribution centres, where employees handle bulk goods and operate heavy machinery
How we engage with our employees
- In South Africa, each distribution centre has a fully fledged human resources (HR) department to support business operations in all matters related to our employees. We interact with the team in Ireland in terms of sharing ideas on strategic HR issues and use the synergies that exist to learn from each other. Interactions with the team in Switzerland have been mainly on business processes and general information sharing.
- From a group perspective, we have functional forums where we review progress according to focus areas and agree on group projects.
- We support career and skills development through the SPAR Academy of Learning
- Engagements include various committees established at the South African distribution centres, including health and safety, shop stewards and values committees, as well as an employee wellness clinic at each South African distribution centre
Creating authentic shared value for employees
Motivated employees are crucial to SPAR’s future. We pride ourselves on being a business that is built on solid relationships that align behaviour to our values and foster meaningful workplace interaction.
Living our values is an integral part of advancing SPAR’s organisational culture. We keep the values top of mind by creating awareness and recognising employees who are actively living the values. The associated behaviour is integrated into HR processes, such as, for example, employee on-boarding, training interventions and recruitment.
SPAR was again certified as one of the Top Employers in South Africa in 2017, with the results indicating that “the SPAR Group provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation and has demonstrated its leadership status in the HR environment, always striving to optimise its employment practices and to develop its employees.”
We recognise the importance of positioning SPAR as an employer of choice in an unpredictable business environment where we have to compete for scarce skills.
Our employment offering has expanded significantly over the past few years following the acquisition of several international operations. Throughout the group, employees now have career options in different geographies.
During the 2017 financial year, 13 411 days (2016: 9 060 days) were spent in employee training in South Africa. Courses cover a wide spectrum from enhancing operational proficiency at floor level, to development programmes to grow management. In total, R18.8 million was spent on training, which reached 10 037 employees across the group’s operations. Read more about our employee development here.
SPAR upholds our employees’ rights to freedom of association and collective bargaining. In South Africa, we have a record of strong relations with our workforce and the trade union, the South African Commercial Catering and Allied Workers Union (SACCAWU). We are committed to maintaining positive relationships with unions at the relevant distribution centres and to agree on acceptable terms of employment of unionised members.
Three of our South African distribution centres, namely KwaZulu-Natal, North Rand and South Rand, are unionised and have recognition agreements in place with SACCAWU. Each distribution centre engages in wage negotiations according to a cyclical programme, and these negotiations are conducted directly between senior management and union representatives. The other four distribution centres, namely Western Cape, Eastern Cape, Lowveld and Build it, are not unionised.
We invest in the development of our shop stewards as well as sharing information with them. We involve the union officials as stakeholders to ensure that we educate them about our business. We also pride ourselves in paying above-average salaries in our industry. We provide a minimum of eight weeks’ notice prior to the implementation of any significant operational change that could substantively affect employees or their elected representatives as we believe in being transparent in our dealings and involving those affected in finding a solution.
No material industrial relations incidents occurred in 2017. Read more about measures to mitigate this risk in the risk section.
SPAR is committed to developing an organisational culture which respects human right principles aimed at promoting and protecting human rights. This includes the Universal Declaration of Human Rights and the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work.
SPAR views transformation as a business imperative rather than as a compliance issue. For us to fully understand the markets we serve, we rely on having a diverse workforce. In South Africa, transformation is measured through our BBBEE scorecard, with SPAR achieving a level 8 in 2017.
In South Africa, there are approximately 45 SPAR employees – who carry a wealth of organisational knowledge and wisdom – approaching retirement age within the next few years. This has raised the level of importance of an effective talent succession pipeline. Several leadership changes in the past year started paving the way for further leadership talent development. In the logistics team, a pilot programme was also launched to enable the extraction and transfer of tacit knowledge of the business. This will be rolled out further in 2018.
Our group talent strategy is integrated to support national and regional requirements, allowing for best practice and parity to meet current and future strategic resource allocation needs. It is aligned to our strategic intent and supports our business imperative for ‘motivated and competent people’.
SPAR provides employees with a wellness service through clinics at each distribution centre. We invested R4.2 million (2016: R3.7 million) in this service during the year. The service is provided free of charge to all on-site employees, with support focused on health and wellness, and liquor and substance abuse. In terms of wellness, we partnered with a biokineticist, who developed an exercise programme, which is offered to employees twice a week at head office, to build strength, aid body conditioning and aid stress release.
SPAR has an HIV/Aids policy and management framework in place. HIV-positive employees have access to voluntary counselling and support. SPAR runs HIV/Aids awareness campaigns, accompanied by regular training facilitated by dedicated peer counsellors, to address workplace challenges relating to HIV/Aids. All employees have access to a voluntary medical examination on an annual basis.
Although our retailers’ employees are a secondary level stakeholder for SPAR, we provide retailers with HR support, training and information. Through the guilds, for example, we have started engaging with retailers to prepare them for the new minimum wage in South Africa, which is applicable from May 2018.
Strategic risks relating to employees
- Disruptions of operations due to labour disputes and/or industrial mass action
Who they are
SPAR retailers are independent entrepreneurs who choose to own their businesses and manage these under our internationally recognisable brand.
Each SPAR therefore has its own regional personality, offering consumers products that are unique to their local store and unique requirements. Our retailers take full advantage of the benefits of the voluntary trading model by sourcing specific goods from local traders, while also using SPAR’s buying expertise.
independent store owners operate under the SPAR brand in the three geographies
stores in South Africa and five stores in Switzerland were upgraded in the past year
How we engage with our retailers
- Retailers have regular interactions with regional and distribution centre management and operations teams
- Our retail operations teams make regular store visits and do monthly performance monitoring through tailored service packages (TSPs)
- South African, Irish and Swiss retailers are invited to the annual SPAR retail convention
- Retailers are members of the regional and national guilds with representatives who attend regular meetings to give input on marketing, pricing and strategy
- We invite retailers on ‘Look and Learn’ trips, both locally and abroad
Creating authentic shared value for retailers
The success of the voluntary trading model hinges on maintaining a robust working relationship between distribution centres and retailers. For SPAR, the quality of this relationship is dependent on our ability to equip our retailers to run a sustainably successful and professional business. Under the current economic conditions, and in the face of rising inflationary cost pressures and increased competition, maintaining this relationship remains our top priority.
The SPAR support team provides retailers with consultation and assistance in all areas of retail operations, including merchandising, promotions and advertising programmes, financial controls, employee and industrial relations, new store development as well as refurbishments or upgrades to existing stores.
We have recently increased our support through financial benchmarking and the development of TSPs that respond to the unique challenges of individual stores. This is particularly important in South Africa, where customer demographics, spending power and the surrounding infrastructure vary greatly across regions.
All retailers have access to an online database that makes available various SPAR store and product specifications and best practice manuals. This includes guidance on recipes and pricing to achieve consistency and quality in fresh produce and the growing home-meal replacement segment. This is supported by the SPAR Academy of Learning, which provides access to a variety of e-learning programmes shaped in response to retailers’ needs. These programmes range from short-term guidance on how to solve day-to-day issues in -store, to longer-term programmes that build HR and supervisory capability. The guilds further provide retailers with marketing support and access to SPAR’s development fund to invest in refurbishments.
We remain committed to growing our retailer base, while supporting our existing retailers. In particular, our focus is on attracting black entrepreneurs in South Africa. All new retailers receive support and guidance from the group as well as the Guild in assisting them to overcome challenges associated with the initial set-up phase.
We also support our retailers in their engagement with their communities. SPAR retailers invest in a broad variety of community-based programmes.
Retail training initiatives in South Africa
To create a pool of entry-level candidates from which retailers can recruit. 1 520 candidates trained during the year and 429 have been placed in jobs.
Good Food Fundi
Skills programme in the areas of baking, fresh produce, home-meal replacements and butchery.
Retail management programme
A distance learning course to improve retailer skills. Since 2011, 312 retailers have completed this course.
Management induction programme
A programme assisting new retailers to understand how SPAR operates. Since 2002, 1 539 delegates have completed the course.
A programme to effectively manage wastage and shrinkage, identify ways of improving profits, implement and understand legislative health and safety standards and maintain the SPAR standards for a fresh department.
Reached 417 stores this year, with more than 36 769 programmes conducted and 17 334 employees trained.
These training initiatives – e-learning, in particular – address the needs of retailers who require access to affordable training without employees having to travel extensively to attend sessions. Retail employees are able to complete training at times and during periods that are convenient to them and that do not disrupt operations.
Food safety focus at retail level
South African retailers rely on SPAR’s supplier management and audits to ensure food safety compliance for the products provided by the distribution centres. Where retailers elect to source their own products from smaller suppliers, they take responsibility for food safety. Since this poses a risk to SPAR and retailers alike, we work with retailers and hold them accountable to ensure that the appropriate controls are in place and documented. We also assist small suppliers to improve and align with programmes such as GFSI.
An additional food safety control takes the form of quarterly inspections of all stores by a SPAR service provider.
The operations in Ireland and Switzerland rely, to a larger extent, on government inspectors who enforce food safety regulations, enhanced by an internal SPAR audit programme.
The new GUEST programme
To assist our retailers in continuously improving their customer service levels, we launched a new programme in September 2017. The GUEST programme is designed around the following key themes:
The programme aims to treat customers as personal guests and involves appointing a customer champion per store.
The programme was launched with a manual, point-of-sale material, e-learning modules and a monitoring element that will include video feedback per store.
Strategic risks relating to retailers
- Poor individual retailer performance impacting SPAR in terms of reputation, brand, price perception, store viability, group profitability and efficiency. This includes increased working capital and poor financial management by retailers, or a lack of retailer involvement in the communities they serve
- Loss of retailers and retail stores to competitors
- Poor adherence and implementation of group initiatives by retailers, which limits our ability to market offerings on a national basis, and which results in financial and reputational damage
- Major customer groups negatively influence the sustainability of the business through disproportional impact on distribution centres and efficiencies
Who they are
Due to our geographical spread and range of store formats, we service the full spectrum of income groups in all territories.
We strive to provide consumers with an enjoyable and memorable shopping experience through a service and product offering that includes more than 1 000 exclusive SPAR house brand products. These products deliver premium quality at competitive prices.
How we engage with our consumers
- We invite consumers to interact with us through marketing and promotional campaigns
- We do ad hoc customer perception surveys
- In South Africa, we have an in-house customer care line
- Our owner-managed store model facilitates direct daily interaction with consumers
- We engage through social media channels, including through Text Me and our SPAR Rewards programmes
Creating authentic shared value for consumers
Ensuring that SPAR is perceived as offering customers value, quality and convenience is critical in growing and maintaining our market share. In South Africa, we remain within the industry price benchmark on the surveyed basket. We also work with our retailers to offer consumers a comfortable and rewarding shopping experience focused on cleanliness, convenience and employee friendliness.
We service the full spectrum of income groups in South Africa, which exposes the group to a wide range of trading patterns. Generally, higher-income consumers opt for convenience items and fresh produce. This includes ready-to-eat products, home-meal replacement items and daily, top-up shopping. Conversely, lower-income consumers are more likely to do a monthly shop, with an emphasis on commodity and bulk products. The ability to stock the appropriate product mix to cater accurately for unique customer profiles at store level is a key strength of the voluntary trading model. This enables retailers to customise their service offering, thereby unlocking value for consumers.
We further strive to offer consumers value through our South African SPAR Rewards programme. Participating consumers benefit from electronic product coupons that are sent to their mobile phones to help them save money. Steady growth in card activation, store participation and Text Me messages confirm the success of the programme. The launch of TOPS Rewards further expanded the programme.
In South Africa, SPAR has an in-house customer care line that addresses complaints and queries. This number is provided on all SPAR branded products. All queries relating to non-SPAR branded products are directed to the relevant suppliers.
Marketing campaigns focused on promoting family values and a balanced lifestyle are also important in maintaining the group’s positive engagements with consumers.
Product responsibility and nutrition
SPAR’s commitment to food safety and nutrition provides consumers with quality assurance and aims to promote healthy living. We deliver on our promise to provide consumers with high-quality, traceable product through strict adherence to product and packaging specifications. This includes providing information on sourcing and ingredients.
To ensure our products meet the highest health and safety standards, we contract with an external laboratory that conducts random monthly testing across our entire product range. This ensures that our products meet a strict set of composition specifications. These specifications are in line with best practice and comply with all relevant legislation. This includes meeting government’s proposed reductions in sugar and salt concentration.
SPAR developed a nutritional strategy to support its commitment to house brand innovation and to raise awareness about healthy nutrition for consumers.
The following are the core principles of the strategy:
- Providing enough information to enable consumers to make informed choices
- Leveraging our house brands and our suppliers’ brands to deliver on our strategy
- Ensuring compliance with legislation
- Collaborating with government, where possible, to deliver nutritious food to the lower end of the market
We are committed to promoting the responsible consumption of liquor. SPAR is a member of the Industry Association for Responsible Alcohol Use (ARA).
Further initiatives in terms of nutrition is the introduction of water at checkout counters, leaflets in stores and options to reduce the sugar and fat content in products. Our future focus will be on the reformulation of products and the development of new products in our range, particularly in meal solutions.
Strategic risks relating to consumers
- New and existing competition, including foreign entrants, could take market share through price, range or hygiene factors
Who they are
Our stores are owner managed by individuals who engage with their local community in the areas where the stores and distribution centres are situated.
How we engage with communities
- Each SPAR store aims to be at the centre of the community by offering an end-to-end product range
- Philanthropic activities at retailer level to grow brand loyalty and play a positive role
- Investment in community development initiatives at group level, including sponsorships
Creating authentic shared value for communities
SPAR stores play a key role in the community as the local supplier of household goods. Other brand offerings, such as TOPS at SPAR and Pharmacy at SPAR, further ensure that a local neighbourhood SPAR can become a convenient, one-stop shopping destination. Build it stores furthermore provide rural and urban communities with a one-stop home building solution.
The voluntary trading model enables retailers to support local enterprise development and, in so doing, adding value by growing the local economy. Retailers and their employees are also often from the local community, which strengthens personal ties with their target market.
SPAR is founded on passion, family values and entrepreneurship. To foster this culture and position the SPAR brand as a force for good in society, the group encourages retailers to be the centre of their community by supporting philanthropic and sponsorship initiatives at store level.
There is a symbiotic relationship between SPAR’s continued growth and the sustainability of the communities that support our stores. Our formal corporate social investment (CSI) policy ensures that allocated funds support meaningful, sustainable projects, locally and nationally. During the year, SPAR invested R17.7 million (2016: R15.7 million) in CSI initiatives and R19.3 million (2016: R16.8 million) in various sponsorship projects.
Community investment projects
SPAR has an established community investment programme that is implemented according to the group’s CSI policy. This policy guides community engagement on a national, distribution centre as well as community level to ensure that we move beyond donation-making to partnering with communities to contribute towards sustainable projects.
SPAR’s specific focus areas include food security and nutrition, health and well-being, and crime prevention. We believe in the power of education, and skills transfer and personal development are incorporated in our chosen community engagement initiatives. Our involvement in sports and sport-related initiatives is an area where we can promote SPAR as a brand associated with health and well-being, personal development and community wellness.
In South Africa, on a national level, SPAR’s community projects address prevalent issues with a far-reaching impact. On a distribution and community level, projects respond to the specific needs of local communities to create meaningful change.
Our main focus areas are:
- feeding schemes, food production through income-generating projects, and educational programmes aimed at minimising the impact of poverty on communities;
- educating communities on health issues such as nutrition, cancer, and the impact of HIV/Aids; and
- training unemployed youth and supporting community transformation initiatives that play a role in combating crime.
Community engagement is fully integrated into the daily operations of SPAR – at our corporate offices, distribution centres and warehouses.
Read more about our key CSI activities here.
Our contribution to addressing cancer in childhood
During the 2017 financial year, SPAR joined the Vuka Khuluma (wake up and talk) campaign run by the Childhood Cancer Foundation of South Africa (CHOC). The campaign highlights the prevalence of cancer among children while increasing diagnoses of childhood cancer and driving access to available care and treatment. The campaign was piloted in KwaZulu-Natal and will be rolled out nationally. The opportunity to participate in Vuka Khuluma has been extended to all SUPERSPAR, SPAR, KWIKSPAR, SaveMor, Build it and Pharmacy at SPAR stores in KwaZulu-Natal. Stores volunteer an in-store representative to be trained by CHOC on the early warning signs of childhood cancer. These stores then serve as Vuka Khuluma touchpoints to which the community may turn for guidance and assistance.
Strategic risks relating to communities
- Political instability in SPAR markets hinders business through national or international events and fundamental shifts in economic systems due to policy changes
- Poor individual retailer performance impacting SPAR in terms of reputation, brand, price perception, store viability, group profitability and efficiency. This includes increased working capital and poor financial management by retailers or lack of involvement by retailers in the communities they serve.