Monday , November 29 2021

Buy profits Changing the behavior of South African buyers



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The Spar Group reported on Wednesday (November 18) that it had a 13.5% increase in turnover in the year ending September 2020, as consumers were in the midst of the Covid-19 pandemic and supporting local traders to buyers, resulting in deadlines in different markets.

The group is based in South Africa, Ireland, Switzerland and Poland.

Profitability was positively impacted by changes in sales mixes, as increased household consumption pushed high-margin foods and new categories, he said. Normalized diluted earnings per share for the group increased by 8.8%, and the committee noted a final dividend of 665 cents per share.

Equity earnings rose 0.5% to 1,135 cents, and normalized diluted earnings for equities rose 8.8% to 1,262, he said.

Spar South Africa increased its wholesale turnover by 5.8% to R788.6 billion. The main food business increased sales by 9.2%, supported by strong demand for food. During this period, wholesale food inflation, measured internally, rose to 3.9%.

Spar’s South African turnover grew by 5.8% to R78.6 billion euros, reflecting the impact of the reduction in sales on the replacement of liquor, cigarettes, home meal replacement and building materials categories, and selected trade restrictions in a number of subsequent categories.

“Although we saw large volumes in the food and health and beauty categories, those volumes offset the loss of liquor and cigarette sales as a result of the ban on trade in those categories.”

The combined growth in the turnover of the food and liquor wholesale business was 6.2% and should be seen in line with the 3.9% inflation of food calculated internally, the retailer said. This measure of inflation fell from 4.1% in the first half of the year to 3.1% in 2019, he said.

Spar (basic food business) saw a 9.2% increase in wholesale turnover to R62.9 trillion euros (2019: R57.6 trillion euros), driven by changes in consumer purchasing patterns in favor of local, convenient and trusted retailers, as well as domestic also increased consumption. , caused by pandemics.

In the retail market, turnover increased by 8.5% to R91.2 billion euros (2019: R84.1 billion) and similar to retail sales increased by 7.3%.

Home brands, including private label Spar products, had very good results. Private label wholesale sales rose 14.1% to R10.5 billion, accounting for 16.7% of Spar’s core turnover. The total turnover of all household brands increased by 12.1% to R15 billion, and is almost 24% of the main turnover.

The group says it continues to drive organic retail growth through in-store renovations, including the integration of successful store concepts such as Chicken Chikka grocery stores.

The number of stores has increased to 15 Spar stores in different formats, bringing the total number of stores to 975. Spar’s TOPS has been severely affected by trade restrictions in South Africa and the sale of liquor. The wholesale turnover of this business fell by 15.8% to R6.4 billion (2019: 7.6 billion).

“Our retail sales fell by 17.8% to R10.5 billion (2019: R12.8 billion), while similar sales fell by 19.7%,” he said. During this period, the TOPS in the Spar store network has added 20 stores cleanly to 842 stores, and 70 stores have been refurbished. The total retail area for this format increased by 3.6% (2019: 6.7%).

The Pharmacy of the SPAR business developed 12 new stores a year, bringing the number of pharmacy stores to 132 stores. The group said that this business had increased its turnover by 3.6% to R1 072.8 million.


Read: Major changes are planned for Woolworths, Pick n Pay and Checkers



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