Spar profits hit by July riots, continuing effects of lockdown booze sale bans
The Spar Group has reported a turnover increase of close to 3% to almost R128 billion for the year ended September 30 2021.
Spar Southern Africa contributed growth in wholesale turnover of 3.4% to R81.3 billion.
In South Africa, many retailers in Gauteng and KwaZulu-Natal were significantly impacted by the July unrest.
"The estimated wholesale turnover loss for the period is R638.4 million across our core grocery, liquor and Build It businesses - approximately 0.8% of turnover for these businesses combined."
Spar says it has helped facilitate the payout of R572 million to affected retailers so far, from the SA Special Risks Insurance Association (Sasria).
Bruce Whitfield interviews Brett Botten, CEO of the Spar Group.
We had 180-odd stores impacted... We've managed to rebuild about 130 so we still have around 50 more or less that are still closed by the end of the year, 20 of which are Spar stores. Most of those will be rebuilt in the months going forward.Brett Botten, CEO - Spar Group
About 20 stores across all of our banners are long-term rebuild projects... but our retailers have been incredible with the help of their staff and the communities, so we're positive about that.Brett Botten, CEO - Spar Group
While Spar owns its own massive distribution centres across the country, its retailers are independent.
Who is responsible then for carrying out the necessary rebuilds?
The funding [of the rebuilds] is the responsibility of the individuals but most of those will be subject to insurance claims. We've been working with our retailers on these claims and many have been paid out.Brett Botten, CEO - Spar Group
We've also worked with them to source equipment to go into the stores... but at the end of the day they're responsible for the funding.Brett Botten, CEO - Spar Group
Added to the July chaos is the damage caused by the lockdown cigarette and alcohol sale bans.
Our liquor performance in the year was pretty strong - up about 11% - but we're still 6% behind where we were in 2019. That's about R500 million at constant pricing. It just shows you how much this has hurt our business.Brett Botten, CEO - Spar Group
In 2021 the days that we lost were Friday, Saturday, Sunday trading mostly. That's big business for us in Tops and it also affects the Spar store next door... We lost that business as well.Brett Botten, CEO - Spar Group
Listen to Botten discuss Spar's local and international performance below:
Source : https://previews.123rf.com/images/petertt/petertt2002/petertt200200271/140915135-bloukrans-bridge-eastern-cape-south-africa-dec-2019-bloukraans-bridge-carrying-a-toll-road-216-metre.jpg
The struggling power utility is blaming the ongoing unprotected labour action by its employees for its decision to further plunge South Africans into darkness – the country is now in stage 4 load shedding until Sunday morning.Read More