SPAR has quietly set up its own retail division, nothing major, just to manage five stores at the moment, bought when their owners went bust. But it will be buying another five before the year is out, and that amounts to a certain scale. In the past, the Friendly One would have held onto the stores to preserve its footprint until a suitable buyer could be found, but now – a retail division. According to Captain Hook, the move is purely defensive, and geared merely at keeping key sites in play. SPAR’s unique franchise model has been good for the Group, even in these tricky times – for the year to September, turnover was up 9% to R35 billions, with operating profit up 8.4% to R1.3 billion, and trading margin a happy 3.8%. Why would SPAR get properly into retail? Some franchisees are battling to get finance from the Fica-embogged banks, and there’s the small matter of bad debt from franchisees to the tune of R55 bar.
Comment: So a retail division could be a shrewd move, helping the group manage more efficiently stores it will be holding onto for longer than it would have liked.