Spar to cut prices to weather downturn
IOL Business - May 22nd 2014, 11:02
Johannesburg - Spar, a South African food and liquor retailer, is counting on regular discounts for sales growth as consumers face higher unemployment, increasing household debt and rising interest rates.
The proportion of sales from discounting to total sales has increased over the last five years, with promotions now accounting for more than 20 percent of revenue, chief executive, Graham O’Connor, said in a phone interview
“People want bargains, they want to have specials, so you certainly need to do it,” he said. “If you don’t do it, you won’t get a vast majority of your customers into the stores.”
While this strategy is driving sales, “there are more and more cherry pickers going for the specials and really rotating the stores where the specials arise,” he said.
South African retailers have been struggling as consumer spending slides. The country’s retail sales growth slowed to 1 percent in March, from 2.3 percent the previous month.
Clicks, a South African beauty and pharmaceutical retailer, last month said volume growth was supported by discounting and promotions, accounting for 26 percent of sales in the six months through February.
Even as South Africans spend less on food, they are spending more on alcohol, O’Connor said.
Spar opened 19 new Tops liquor stores in the six months through March, taking the total to 595, and plans to add a further 20 in its second half.
The company may open 300 Tops outlets over the next six to seven years, he said.
Spar’s net income rose 9.4 percent to 642.9 million rand in the fiscal first half, the Durban-based company said in a statement today.
Profit by this measure climbed 13 percent in the first six months of fiscal 2013.
The shares declined 1.1 percent to 125.41 rand as of 3:53 p.m. in Johannesburg, valuing the company at 21.7 billion rand.From © Independent On-line 2013. All rights reserved.
Exclusive leases must fall: Commission cracks whip on Shoprite, Pick n pay, Spar, Woolies
26/11/2019 - 09:57
The Competition Commission Inquiry into Grocery Retail, published on Monday, called for an end to the exclusive leases negotiated by national retail chains in all shopping malls across the country in a bid to open up access to markets for smaller players.
Spar sees big jump in profit as consumers turn to store labels and alcohol
13/11/2019 - 11:43
Listed retailer Spar has published its financial results for the full year ended September 2019, reporting an 8.4% jump in revenue, with operating profits up 7.2% despite tough conditions across its operations.
2019 South African Loyalty Awards winners announced
01/11/2019 - 14:14
The 2019 South African Loyalty Awards, developed specifically to celebrate loyalty excellence and innovation, announced the awards winners on Wednesday, 30 October, in Cape Town.
Local retailers are outperforming a bad economy
31/10/2019 - 08:49
South African retailers have been battered by poor trading conditions, rising job losses and weak economic growth, which has made it difficult for companies to pass on costs to their customers.
CBD oil product launching countrywide in Clicks and Dis-Chem
15/10/2019 - 14:43
South Africa’s top health and beauty retailers, Clicks and Dis-Chem, are both rolling out the Elixinol range of CBD full-spectrum extract products in October.