Spar — fastmoving.co.za - Retail South Africa

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Introduction:

At the beginning of the 1960s, grocery chains were emerging in South Africa. In response to this threat, a group of eight wholesalers got together and introduced SPAR,which was launched in 1963 to service 500 small retailers.

The SPAR organisation is made up of two types of members: SPAR retailers, who are independent store owners, and SPAR distribution centres, which provide leadership and services to the SPAR retail members in their respective regions. Both member types belong to The SPAR Guild of Southern Africa, a non-profitmaking company set up to co-ordinate and develop SPAR in Southern Africa. The members pay subscriptions to the Guild, which uses these monies to advertise and promote SPAR.

To facilitate the operation, the country is divided into six geographic areas, each with its own regional guild of retail and DC members, with the centre of control being the local distribution centre. It’s a formula that works effectively to unite the organisation in its ongoing drive to remain at the forefront of food retailing in Southern Africa.

The Group's principal activity is wholeselling and distributing goods and services to SPAR retail grocery stores, Build it builders merchandise outlets, and TOPS at SPAR liquor stores. It operates in South Africa and neighbouring countries. It operates 6 distribution centres, supplies goods and services to almost 800 SPAR stores in South Africa.

Group Structure:

Store Formats:

Spar has responded in keeping with changing trends in retail by continuously reviewing store formats to focus on specific market segments. Currently there are three formats covering food, and specialised formats covering liquor and building materials.

With selling areas of up to 600 m2, KWIKSPAR stores focus on convenience with an emphasis on speed, and freshness in terms of produce, bakery, fresh meat and prepared and take-out foods. KWIKSPARs carry a range of groceries at prices that offer good value. With selling areas of 700 m2 and above, SPAR stores focus on neighbourhood and rural supermarket shopping. SPAR stores are very competitively priced with a strong focus on friendly and professional service, and offer a comprehensive range of groceries backed by fresh produce, in-store bakery, butchery, deli and home meal replacement departments.

With selling areas greater than 1300 m2, SUPERSPAR stores are aggressively priced against the chains and offer a full range of groceries and general merchandise, backed by extensive service departments such as produce, bakery, butchery, deli and meal solutions.

A standalone liquor store, established to take SPAR members into a full range of liquor products. Membership is an extension of The SPAR Guild and is only available to existing KWIKSPAR, SPAR and SUPERSPAR members. TOPS stores must be located within close proximity of the member’s store.

A standalone building materials outlet selling basic building and hardware products to home builders and renovators in the lower to middle sectors of the market. Membership is controlled through The Build it Guild, which is independent of The SPAR Guild. Membership is not confined to SPAR members.

Store Numbers:

	2005	2006	2007
Superstores	130	149	159
Supermarkets	519	521	527
Neighbourhood stores	188	179	178
Liquor stores	172	216	230
Total Grocery retailing	1,009	1,065	1,094

Spar also has non grocery stores which are branded as Build –It

DIY stores

181

228

239

Group Sales:

Group	2005	2006	2007
Turnover (bn)	13.6	17.2	21.7
Headline Earnings (mn)	344.4	406.7	512.9

Group Strategy:
SPAR operates under "voluntary trading" principles which means that while they encourage their retailers to take advantage of SPAR's trading power, retailers can source goods from local traders.

Since the successful listing on the stock exchange in 2004, SPAR in South Africa has expanded fast and channelled significant funds into operations and proprieties, expanding, renovating and improving its store network and appearance. Many stores have been re-modelled and store growth has been fast. New initiatives such as opening more Top liquor stores next to SPAR outlets have made it a well-recognised and popular brand. SPAR is expected to continue with its innovation and store improvement programme in 2008.

International:
SPAR is an international leading global brand and is the world’s largest food retailer, with approximately 15,000 stores in 35 countries worldwide

SPAR (South Africa) has networks in Botswana, Namibia and South Africa. Botswana and Namibia are smaller fringe operations while the importance lies on South Africa.

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