Retail group Spar says it has benefited from a Covid-19-induced trend where consumers opt for local and convenience stores rather than crowded malls, with revenue jumping double digits in its year to end-September.
The group has also increased its final dividend by 8.1% to 865c, and in morning trade the group’s share had surged 7.88% to R195.43, putting it on track for its best day in eight months.
Property groups and retailers have reported that consumers remain wary of bigger malls, with Spar saying on Wednesday that it has also benefited from increased demand for groceries during the pandemic, when people ate more at home.
Group turnover increased by 13.5% to R124.3bn to end-September, as “consumers supported our local, convenient, and trusted retailers during this time of crisis”.
Profits were, however, under pressure amid a change in its sales mix, with Spar’s liquor outlets in SA unable to trade for almost a third of the period due to the government’s restrictions.
This also affected sales of building materials and tobacco.
Headline earnings rose 0.5% to R2.18bn, and Spar increased its total dividend by 8.1% to 865c per share.
Spar said it was facing a weak economy in SA, with consumer spending likely to remain constrained. Europe is also grappling with a second wave of infections, but Spar said it had learnt lessons from the first.