Spar Group realises muted sales growth in hard lockdown aftermath, Newsline

DURBAN – The Spar Group in southern Africa felt the impact of the hard lockdowns and restrictions imposed to contain the spread of Covid-19 in the region, with sales improving a mere 4.8 percent during the 48 weeks to end August from 12.4 percent the prior year.

Spar said on Friday that its overall sales increased to R112.04 billion from R99.67bn last year.

It said the core Spar business recorded an 8.7 upswing in sales with like-for-like up 7.5 percent and internally measured price inflation increasing marginally to 4.6 percent.

It said the performance reflected the impact of the pandemic in the region.

“Turnover for the six months to end March had reported a 7.8 percent increase, while the subsequent five months – which almost exactly mirror the lockdown period – saw sales increase by 1 percent,” the group said.

Spar said the core business was adversely impacted by the ban on the sale of cigarettes, which saw turnover declining 30.5 percent.

It said it recorded a significant 71.9 percent decrease in the five months to end August, year-on-year. The liquor business also reported a 16.4 percent slide in turnover.

Spar said approximately three of the past five months of trading were lost due to liquor trade bans and this saw sales declining 44.1 percent in the period post March.

“The building materials business was already reporting the impact of the weakened sector during the first six months to end March, with sales declining by 2.4 percent.

“In the second half of the financial year, the building sector lost five weeks of trade due to the lockdown and this largely contributed to the turnover declining by 3.5 percent. It has been positive to note that once the sector was re-opened in May, Build It sales have been surprisingly strong,” it said.

In Switzerland, Spar said its turnover rose 11.4 percent as consumers supported the business despite the lockdown. It said growth in turnover over the last five months in local currency was 19.7 percent.

However, in rand terms, the increase rose 31.1 percent. Spar Ireland reported a 5.5 percent surge in euro turnover while the Poland unit traded below expectations.

The group is expected to release its full year results in November.

BUSINESS REPORT