Spar enters the grocery delivery game

accreditation
0:00
play article
Subscribers can listen to this article
Spar's tops! stores were impacted by liquor sales bans.
Spar's tops! stores were impacted by liquor sales bans.
Supplied
  • In a few weeks, Spar will pilot its SPAR2U delivery service.
  • Spar’s move follows those of competitors Pick n Pay's asap, Checkers' Sixty60, and Woolworths' Dash.
  • The service, which will be available via mobile app, will be provided mostly by electric bikes and products will be delivered in recycled paper bags.

In the next few weeks, Spar will join a growing list of retailers that offer delivery services for groceries.

The retailer’s CEO Brett Botten told shareholders on Wednesday that that the group will be piloting its SPAR2U delivery service soon. 

"Although many of our retailers have been quick to respond to consumers’ needs for online shopping, we have recognised the need for a sophisticated offering, tailored for our unique business model," Botten said.

Spar’s move follows those of competitors Pick n Pay's asap, Checkers' Sixty60, and Woolies' Dash. Botten explained that the service, which will be available via mobile app, will be provided mostly by electric bikes and products will be delivered in recycled paper bags.

The products available on SPAR2U will also tailored to the areas it will be serving.

"We believe that the Spar business model requires an online shopping solution that serves our Spar consumers but one which also will add value to our independent retail partners and the communities in which they operate," he said.

Botten added that the retailer has roped in a logistics partner for SPAR2U but he wouldn’t disclose its identity. He said not all stores will be part of the partnership, which may grow to include other logistics providers.

"For instance, a store that services game lodges or golf estate lodges will maybe use their own delivery vehicles to cover that delivery aspect of the solution." 

Botton made the announcement at the group’s results presentation on Wednesday, for the year ended 30 September 2021, which showed that its turnover grew by 2.9% to R127.9 billion. Spar’s operating profit, however, fell by 1.5% to R3.4 billion, compared to 2020, and its headline earnings per share grew by 5.4% to 1 196. The group declared a final dividend of 536 cents.

In southern Africa, Spar’s wholesale turnover grew by 3.4% to R81.3 billion, while the core wholesale food business sales fell by 0.4%.

"As previously reported, the business has seen changing consumer behaviour over the past 18 months due to the pandemic, the impact of the extended lockdowns and restricted liquor trading, all of which have weighed heavily on certain stores," said the retailer in its results.

Spar lost a third of its total trading days due to bans on the sale of liquor. It’s liquor business tops! had wholesale turnover growth of 11.2%, but was still 6.4% lower than that of 2019.

The unrest that took place in KwaZulu-Natal and Gauteng in July, leading to the closure of the group’s damaged and looted stores, also had an impact on its fourth-quarter performance. By the end of September, 53 of Spar's stores were still closed due to the unrest.

Spar’s Build it, on the other hand, performed well, with its wholesale turnover up by 23.5%, aided by rural home developments and home improvement in urban areas.

The group managed to grow its southern Africa stores to 2 440, opening 26 new stores across all its brands. It upgraded 373 stores, 219 which were Spar stores.

At BWG Foods in Ireland and southwest England, the group saw a 3.5% turnover growth, despite a management transition and Brexit.

Spar acquired BWG through a joint venture with the retail and wholesaler’s management team in 2014.

BWG’s growth also comes on the back of a hospitality industry that continues to be impacted by Covid-19 restrictions. The company has managed to expand its footprint by 15 stores, to 1 406 stores.

Spar Switzerland also performed well with its turnover increasing by 5.6%, as it benefitted from the initial lockdowns and border closures in 2020, which resulted in new business as people shopped closer to home.

In Poland, Spar managed to grow its turnover by 16.2%, which the group said reflected its slowly improving retailer loyalty. Spar currently has 227 stores in Poland.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
15.24
+0.1%
Rand - Pound
20.58
+0.1%
Rand - Euro
17.22
+0.4%
Rand - Aus dollar
10.91
-0.0%
Rand - Yen
0.13
+0.1%
Gold
1,848.85
+0.3%
Silver
23.83
-0.7%
Palladium
2,205.16
+2.7%
Platinum
1,031.69
-0.2%
Brent Crude
86.27
-1.9%
Top 40
65,870
+0.3%
All Share
72,315
+0.2%
Resource 10
72,883
+1.9%
Industrial 25
89,867
-1.2%
Financial 15
14,799
+0.6%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot