Demonstrating its commitment to being a community-first retailer, The SPAR Group achieved significant milestones in 2024, reflecting the success of its strategy to deliver value and innovation. Strong growth across value-focused formats, the pharmacy business, and the expansion of SPAR2U’s on-demand shopping to 525 sites by the end of September – accompanied by a 380% year-on-year increase in order volumes – are among the major highlights of the Group’s results for the year ended 30 September 2024.
Additional highlights include the completion of the SPAR Poland sale, a reduction in debt that strengthened the balance sheet, the resolution of SAP-related issues at the KwaZulu-Natal distribution centre, and progress towards achieving a 3% operating margin in Southern Africa. These achievements contributed to Group turnover rising to R152.3 billion, with earnings per share up 24.5% to 855.9 cents.
“Our journey towards future-proofing SPAR and solidifying our status as the retailer of choice has gained strong momentum in recent months. Through disciplined financial management, we have successfully reduced our debt, enabling us to achieve growth where it counts and create greater stability moving forward,” said Angelo Swartz, CEO of the SPAR Group.
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“These achievements reflect our commitment to excellence and our ability to adapt in an ever-changing business landscape. Our success is also underpinned by our business model, empowering retailers to serve their communities with excellence and agility. While challenges remain, we are confident that our focus on shared growth will drive sustainable success for the Group and the communities we support.”
SPAR Southern Africa, encompassing SPAR, Tops at SPAR, Build it, and Pharmacy at SPAR, reported a 3.7% increase in turnover despite a challenging trading environment characterised by high inflation, elevated interest rates, and low GDP growth. Pharmacy at SPAR stood out with a 14.6% turnover growth driven by the strong performance of Scriptwise. The liquor division achieved an 11% improvement at the wholesale level, while Build it recorded a 2.3% rise in turnover, recovering from a 4.3% decline in the prior year.
“Growth in current market conditions is exceptional and a testament to the trust our customers place in us,” Swartz noted. “We are pleased with the resolution of our SAP integration issue. Not only has this resulted in improved visibility in pricing and subsidies for our retailers, but it has also addressed warehouse management inefficiencies that increased labour and transport costs through the selection of a new warehouse management system”.
“We’re currently experiencing service levels of in excess of 90% with KZN loyalty rates rising from 68.6% in the second quarter of 2024 to 70.9% in fourth quarter of 2024, putting us back on track as the reliable and efficient partner that our retailers have come to expect”.
The Group’s operating profit rose by 15.1% year-on-year to R2.9 billion, with an improvement in the operating profit margin to 1.9% from 1.7% in 2023. These results reflect the Group’s increased focus on cost management and efficiency initiatives, with operating expenses growing by just 3.5%.
“Our independent retailer model offers powerful opportunities for retailers, showcasing the value we deliver and the potential we unlock through fit-for-purpose retailer development, e-commerce innovations, discounted supermarket formats, and specialised business offerings,” Swartz said.
SPAR’s tiered private label approach is on track to offer better value for all shopping budgets, while the launch of a bespoke high-end offering is set to capture the higher-income consumer segment, reinforcing SPAR’s commitment to quality across all market segments.
“Meanwhile, our revitalised SaveMor store format will include high quality products at competitive prices. This model will focus on operational efficiency to establish SaveMor as a leading discount retailer,” said Swartz.
SPAR’s on-demand grocery delivery service, SPAR2U, is rapidly expanding to meet consumer needs. “We are proud of this growth and remain committed to further innovation in this space,” Swartz added.
Internationally, SPAR saw mixed results. The BWG Group in Ireland and South-West England achieved a 6.7% turnover growth in rand terms (2.8% in euro), supported by innovation and strong community engagement. While SPAR Switzerland faced economic pressures, with consumers opting for cheaper alternatives locally and abroad, the decline in turnover was limited to just 0.3% in rand terms, reflecting strategic resilience.
“2024 has been a year of transformation. As we approach the new year with renewed vigour and as our strategic changes take full effect, we look forward to delivering more value, convenience, and low prices to our shoppers,” said Swartz. “Looking ahead, SPAR will continue navigating the challenges of a demanding operating environment by driving innovation, efficiencies, and excellence, while fostering strong community connections that will cement our position as South Africa’s retailer of choice.”
