Retail performance in three territories
Retailer success remains at the top of our agendas.
A significant slowdown in sales, particularly in South Africa, exposed cost pressures that resulted in margin contraction for retailers. TOPS at SPAR, SaveMor and Pharmacy at SPAR showed good growth, while maintaining margins.
Positive retail results drivers for 2017 included:
- Increased uptake of 9.7% in SPAR house brands by consumers seeking value. This confirms the trust that consumers have in the quality and price of these products.
- Continued strong growth of 12.4% by TOPS at SPAR with the opening of 42 new stores.
- Expansion in and focus on Pharmacy at SPAR – read more in the case study.
- A deliberate increase in category management support to stores, with immediate benefits in terms of maintaining range, flow and forward share. Retailers are guided on store layout, product lines, and optimised quantity and receive support in turnaround options for underperforming categories. For many retailers, this resulted in good growth despite difficult local economic conditions.
Despite remaining under financial pressure, Build it experienced a solid year in volume growth through its imports warehouse. This was encouraging, especially given that price competition from blended cement and imports negatively affected retailer loyalty.
We implemented a leadership change in the Build it division to create more retail support capacity, driving sustainable turnaround in the business. Wayne Hook was appointed as the new Managing Director. 27 new Build it stores were opened during the 2017 financial year.
Our business in Ireland experienced a strong financial performance. The Gilletts acquisition in South West England strengthened our credibility with both retailers and suppliers. Retailer retention has been good and the transfer of supply chain and logistics expertise to the BWG national distribution centre was completed successfully.
We have made strategic changes, including the appointment of Rob Philipson as the new Chief Executive Officer at SPAR Switzerland. We are set to sell a number of corporate stores to independent retailers, and will continue to drive successful initiatives such as Beantree – the coffee offering – and the development of Backstube – an in-store bakery concept. The first SPAR Express store was opened in the Italian region of Switzerland.