Netherlands-based SPAR International reported sales rose 5.4% globally to €35.8bn. The organisation said entry into four new markets, the addition of 335 new stores and the continued focus on its ‘Better Together’ strategy had underpinned the pace of its growth.
2018 ‘an exceptionally strong year for SPAR’
Discussing the results, SPAR International’s managing director, Tobias Wasmuht, described the retailer’s performance as representing ‘another exceptionally strong year for SPAR’. Wasmuht went on to highlight the importance of the retailer’s ‘Better Together’ strategy, of which it was in the third year of five. The strategy is focused on ‘SPAR’s core ethos of uniting together the global scale and resources of the SPAR network so that all shall benefit’.
At the end of 2018, SPAR operated in 48 countries, with 13,112 stores under the brand accounting for 7,441,838 sq. m of selling space.
Continued strength across Europe
SPAR said sales grew by 4.1% to €22.1bn in Western Europe and by 15.8% in Central and Eastern Europe, to €5.8bn.
In Western Europe SPAR said its continued investment in its stores and the growing shopper trend of buying little, often and locally was benefiting its members, who operated neighbourhood-based stores. This trend was being accentuated by longer term trends, such as ‘smaller and single households, as well as aging populations and urbanisation’, which are likely to continue to benefit the retailer.
In Central and Eastern Europe SPAR gave more country-specific reasons for growth in the different markets where it operates. SPAR Hungary saw growth advance by 9.8%, SPAR Croatia by 15.3% and SPAR Slovenia by 4.1%. SPAR highlighted how its partners’ combined sales broke through the €2bn mark for the first time, with sales up by 27.8% in local currency terms.
Strong growth in Africa and the Middle East
Across the 15 countries where it operates, SPAR said sales rose by 8.2% to €5.9bn. South Africa continued to dominate its performance in the region, where it generated sales of €4.9bn, after growing sales by 5.7% at constant exchange rates. This was supported by fast paced growth in Botswana (+19.2%), Cameroon (+65.6%), Mozambique (+56.2%), Nigeria (+8%) and Zimbabwe (+39.1%).
There was continued good growth in the Middle East, where it said its partners had ‘been able to adapt and tailor their retail proposition in tune with modern consumers’.
SPAR approaches €2bn in sales in Asia
In its smallest region, SPAR said its seven countries’ operations generated sales of €1.96bn in 2018 from their 573 stores. China accounted for most sales, with its members generating sales worth €1.5bn in 2018 ‘with particularly strong growth in the Shandong and Guangzhou provinces’. It highlighted the importance of its members’ growing use of technology in-store, such as ‘facial recognition payment technology and engaging with customers instore through mobile applications, including scan & go solutions’.
Short term focus to remain on ‘Better Together’ strategy
SPAR said its performance in 2018, and over the last three years when it has generated a ‘compound annual growth of over 5%’ gave it the confidence to sustain its existing strategy. This will see it accelerate its international joint buying and procurement ‘ by further harnessing [its] international scale, pooling [its] global resources to reap economies of scale in all areas of [its] business and uniting [its] global partners to be and act better together’.
By region, SPAR said it expected to benefit from existing trends in Western Europe, expansion in Central and Eastern Europe, through the award of two new licence agreements in the region, with a similar reason given for its faith in driving growth in China. It noted that ‘plans are at an advanced stage for the expansion of SPAR in South and Central America’, which would see it enter the continent for the first time.
Retail Analysis weekly newsletter