Spar lags peers as share price drops
It has been a tough start to the year for Spar Group, which has seen its share price shed about 10% so far in 2017. The decline places the food retailer last in comparison to peers Shoprite, Woolworths and Pick n Pay.
Pick n Pay has made good gains in 2017 and is up 4.85%. Shoprite’s share price has increased 0.89% year to date, while Woolworths is down 0.45%. Of the mentioned companies, Spar is the only one with exposure to the UK, which is still reeling from Britain’s decision to leave the EU. Supermarkets in the region are struggling as the pound has lost buying power. Food prices have risen and the effects are being felt by citizens.
This has resulted in price wars among retailers — not unlike those seen in SA.
Measured in euros, its Irish business had increased sales 1.5% in the quarter to end-December, Spar said in a trading update on Tuesday.
Measured in rand, sales declined by 2.6%.
The retailer’s South African operations grew sales 5.8%, dragged down by its hardware chain Build It. Excluding Build It, South African sales increased 6.2%, with internally measured price inflation of about 8.3%.