Spar group’s Tops outlets boost growth despite competitive arena
The New Age Online - Nov 30th 2011, 10:28
Spar Group emerged from a challenging consumer environment with a 10.4% growth in turnover and 3.9% increase in earnings as reported earlier this month in a performance partly boosted by the resilience of its liquor outlet, Tops.
Known largely for its grocery outlets, Spar maintains a wide-ranging portfolio of independently owned Spar shops, 10 internally owned Spar shops, building materials trader Build it and liquor chain store Tops.
Spar added Tops to its portfolio a few years ago and now claims that “this brand can now confidently claim to be the number 1 liquor brand in the country”.
The group said Tops enjoyed another successful year and store numbers increased to 501 with 48 new stores opening during the financial year ended September. “Liquor sales remained extremely strong with wholesale turnover reaching R2.6bn and showing an impressive growth of 19.9%.”
Overall, Spar said “trading for the year under review continued to be challenging with consumer spending under pressure, low levels of food inflation for most of the period and a highly competitive retail environment”.
Reflecting growth of 10.4%, turnover came to R38.4bn. Profit after tax showed 4% growth at R952.6m. Headline earnings grew 3.9% to 557c.
The group said growth was largely driven by “exceptional performances from liquor and building materials businesses”.
Spar wholesale turnover of R31.9bn increased by 8.6%. Retail trading space was up by 3% with the opening of 25 new stores. At year end the group serviced 859 Spar stores.
The group said Build it had an excellent trading year with 21 new stores opening and wholesale turnover growing by 18.2% to R3.9bn.
The group said its retail division added a further five Spar retail stores during the year under review, bringing the total of Spar stores owned to 10.
“The trading performance of these stores is not satisfactory, with a loss of R29.9mn incurred for the year.
“Considerable effort and focus will ensure an improvement in this division’s performance in the new year,” said the group.
The group said it expected 2012 to be a challenging year, with consumer spending remaining under pressure and an increasingly competitive trading environment.
“We are, nevertheless, positive about the opportunities for the business and will continue to focus on improving the performance of the new business initiatives, driving retail growth and realising further cost savings through improved operating efficiencies,” the group said. firstname.lastname@example.org
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