THE BOTTOM LINE
Africa, Ireland, Switzerland: Spar’s on a pumping good run
Buying wholesalers has enabled its franchisers to get better deals, making them more competitive
There was a lot to like about the Spar Group’s results for the year to end-September. Its operations in southern Africa, Ireland and Switzerland respectively demonstrated a steady performance in a difficult market, strong growth from a business already on the rise, and a turnaround in an underperforming operation.
Digging into the numbers, you can see what the group’s doing right. Buying several wholesalers over the past few years has enabled its franchisers to get better deals, which in turn has made them more competitive.
Spar is in a good space, but can it continue this run? The short answer is yes. For the most part, its prospects appear to be solid.
For one, its Irish operation looks like it will become a significant driver of the group’s growth. It recently bought the frozen and chilled foods wholesaler Corrib Food Products, which continues its strategy of buying wholesalers to increase its buying power.
Its Swiss business has disposed of its underperforming stores and new initiatives such as the introduction of loyalty cards for its customers is putting this operation on a firmer footing.
As for SA, it has a deal with Shell to roll out up to 80 forecourt stores by the end of 2020.
Even so, there are things that can stunt its progress. The difficult local economy, concerns over Brexit, and the possibility of a stronger rand could affect its prospects. But even with these things simmering in the background, Spar still looks like a company that’s on the up.