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Tough times for Spur, but new SA outlets in the pipeline

2 March 2021 7:55 PM
Tags:
The Money Show
Bruce Whitfield
spur
half-year earnings
spur corporation
mr d
rocomamas
Lockdown
COVID-19
Val Nichas
take-away sales

Spur's profits plummeted in the wake of lockdowns, but the loyalty of customers is 'quite amazing' says Group CEO Val Nichas.

The Spur Corporation's franchised restaurants have been hit hard by Covid-19 and the resulting lockdowns.

This is reflected in Spur's results for the second half of 2020.

Group revenue declined by 40.2% to R314.2 million in the six months up to December.

Spur on Facebook @SpurSteakRanches

Total franchised restaurant sales declined by 29.5% to R2.9 billion for the half year.

Sales from international franchised restaurants dropped by 17.3% in rand terms, while sales from outlets in South Africa showed the biggest decrease with 31.0%.

RELATED: End of an era as Newlands' Golden Spur (first in the franchise) shuts its doors

This is despite a boost for take-away sales as people stayed home.

“Take-away sales more than doubled over the previous year and now account for 27% of total restaurant sales, with take-away sales in RocoMamas comprising 53% of the brand’s sales. We grew our sales with Mr D by 72% and Uber Eats by 41% for the six months.”

Despite the collapse in total earnings, the group plans to open eight to ten new restaurants in South Africa in the second half of the financial year.

International expansion will focus mainly on the rest of Africa, with four to six new sites planned.

Bruce Whitfield interviews Val Nichas, who was appointed as Group CEO of the Spur Corporation in October last year.

She describes the huge negative impact of the varying stages of lockdown.

The minute we started trading relatively normally we had the second wave... It's been a very erratic trading period and we foresee that it will continue, but closely correlated with the restrictions.

Val Nichas, Group CEO - Spur Corporation

Obviously that's why we're supplementing the turnover with take-aways.

Val Nichas, Group CEO - Spur Corporation

At the same time Spur is "quite amazed" at the loyalty of customers in the face of the challenges posed by the pandemic.

"Even at 50 people (capacity) we've got people queueing up or sitting on the benches waiting to be seated".

The world has to respond very nimbly to the market as we see these changes happen... We're super-excited about moving to Level 1.

Val Nichas, Group CEO - Spur Corporation

Whitfield asked listeners whether it is possibly time to refresh the Spur brand.

Some, of course, want a brand they've known since childhood to stay exactly the same.

Others feel the Western theme and Native American "stereotypes" are outdated.

This is Nichas' response:

All brands go through a life cycle and if we look at all leading brands, they're constantly refreshing their proposition, their value offering, their store/restaurant experience, services and products.

Val Nichas, Group CEO - Spur Corporation

We certainly are going to be looking at what Spur's going to start looking like going forward in terms of its future growth, in terms of its next generation... I can't tell you how it's going to evolve, but certainly we've got to be continuously refreshing the business like you would any brand that needs to be sustainable going forward.

Val Nichas, Group CEO - Spur Corporation

Listen to the conversation on The Money Show:




2 March 2021 7:55 PM
Tags:
The Money Show
Bruce Whitfield
spur
half-year earnings
spur corporation
mr d
rocomamas
Lockdown
COVID-19
Val Nichas
take-away sales

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