Booze, drugs and DIY boost Spar in difficult economy

Robust liquor sales and the inclusion of the pharmaceutical distribution business it bought in 2018 year boosted grocery retailer Spar Group in the weeks leading up to Christmas.

Spar said on Tuesday total sales increased 8.2% to R36.5bn for the 17 weeks to end-January 27. This growth was in part, driven by a 19% surge in liquor sales and the contribution of pharmaceutical distributor S. Buys for the first time.

Though it said the 7.6% rise in sales for its South African operation “reflected weak consumer spend,” its performance was comparatively stronger than its rival Shoprite, which saw sales for its local operations rise 3.18% for the quarter to end-December.

Along with the rise in liquor sales and the contribution coming from S Buys, Spar also benefited from the performance of its building material chain, Build It, which increased sales 10.3%.

Spar’s Irish chain increased turnover 8.4% when measured in euros. This operation’s growth was driven in part by the acquisitions of 4 Aces Wholesale and Corrib Foods businesses, which were bought in 2018.

Its operations in Switzerland did not fare as well, with difficult local conditions seeing sales fall 1.5% when measured in Swiss Francs. Spar said that aside from difficult trading conditions, its results were also affected by the disposal of some of its corporate-owned stores.

The group said its results for the half-year to end-March would be released on or about May 15.

claasenl@businesslive.co.za