SPAR
A voluntary trading group. Stores owned and run by SPAR members, supplied and serviced by regional Distribution Centres, owned by SPAR SA
Operational Structure
Each DC managed autonomously as a profit centre by an Executive Mgt team
Decisions made by Group Services do not have to be implemented at DC level
Spar do not own any stores!
6 DC’s are owned and run by SPAR and provide leadership and expertise to retail members.
Channel / Formats
SPAR Stores
Trading Brand Positioning Size / Ranging
Every day convenience, speed and freshness Up to 600m2
Limited range of produce, bakery, fresh meat, prepared and take-out foods
Neighbourhood and rural supermarket shopping 700m2 -1300m2 - Range of groceries backed by fresh produce, in-store bakery, butchery, deli and home meal replacement departments
Aggressively priced one-stop bulk shopping 1300m2 + : Full range of groceries and general merchandise with service departments such as produce, bakery, butchery, deli and meal solutions
Standalone liquor stores for SPAR members 120m2 + : Full range of liquor products
A one-stop retailer of building materials primarily on a cash & carry basis supplying the building trade and DIY customers
Basic building and hardware products
Store Distribution – South Africa
Source : SPAR July 2009
Botswana incl with N.Rand, Namibia incl with W.Cape
Exceptional brand management and support capacity for members ensuring a consistent message over a wide range of store formats and consumer markets
A finely tuned logistics and distribution operation
Brand appeal and consistent brand message across LSMs 1-10
Exceptional reach into SAs full range of markets (LSM 1-10) through the flexibility built into the Retailer Member model E.g. : SPAR Thohoyandou sells 5 tons of chicken feet a day
Ongoing store refurbishment/ modernisation programme (20% stores per year)
Core competencies
Actual gross margin declined by 0,2% attributed by SPAR to a change in the sales mix (DC sales versus drop shipment), and the competitive trading environment
Group Financial Performance
*Note: CPIX was re-weighted at the end of 2008. 2009 figure is CPI
The Group (R’million) FY2004 FY2005 FY2006 FY2007 FY2008 HFY2009
Group Turnover 11,985 13,599 17,010 21,704 26,742 16,100
Group % Turnover Growth 18.0% 13.5% 25.1% 27.6% 23.2% 24.5%
Gross Profit % 9.2% 8.8% 8.4% 8.2% 8.1% 7.9%
Operating Profit 395 499 603 775 972 605.1
Operating Profit Margin 3.3% 3.6% 3.5% 3.5% 3.6% 3.8%
CPIX (Average for the period) 4.3% 3.9% 4.4% 5.8 10.4% 10.9%
Strong growth for the past three years with excellent performance at retail
1. The SPAR Brand : “Good For You”
Strategic Drivers
•Young, modern and energetic. •Focus on offering an unforgettable shopping experience •The principle : Life is full of great moments and shopping at SPAR is one of them
The Objective:
To make SPAR the first choice food store that appeals to all South Africans no matter where they live, what ethnic group they belong to, their gender, their age or their spending power
SUPERSPAR, Glenwood, KwaZulu Natal – Feb 09
Shopper Communication > Inside the Store
2. The Store Experience: The Re-Mix Programme
The store remodel programme > ‘Re-Mix’ and ‘Let’s Entertain’ strategyTarget extension and modernisation of 20% of stores p.a
129 stores in 2007 / 144 in 2008
Strategic Drivers
4. Private Label
SPAR driving Private Label very aggressively at the shop shelf and in consumer communication. A critical means of improving SPAR trading margin!
Strategic Drivers
5. Convenience
Focus on high margin specialist service departments, fresh and HMR’s
Be aware of pressure on grocery allocation > store level contact critical
Strategic Drivers
6. Emerging Market
Continued drive into emerging markets with 105 emerging market stores to date
Growing at a significant rate > Greenfields territory, and not an easy win – SPAR model ideal
Strategic Drivers
7. Improved Operational Efficiencies : Distribution
R1bn spent in upgrading facilities ever last 3 years