WRIITEN BY: OMEGA NGEMA
YESTERDAY, one of the country’s major retailers, Spar, announced a share price drop of 7.37%, its largest one in a day since listing 17 years ago.
The Spar group, which also operates in Ireland, Poland and Switzerland said in a statement released yesterday that the worse- than- expected dip was seen after significant weaker sales were experienced in South Africa.
The group indicated that the latest month alcohol ban to curb the spread of the Coronavirus resulted in the group’s liquor division suffering a performance offset at a staggering 17.9 % decline during the period.
While the company is still up 12.23% over the past 12 months and its sales increased 9.8 % to R42.99 billion, the retailer admitted that their South African performance lagged the overseas operations as the company recorded strong growth in Poland and Switzerland.
“The liquor business was heavily impacted by the closure of Tops at Spar retail stores during the period due to lockdown regulations banning the sale of alcohol and significantly reduced trading hours when the ban was lifted and wholesale liquor sales declined by 17.9 percent,” the group said.
Nonetheless the group’s hardware and home-ware division, Build It indicated tremendous growth recording a 25.6 percent increase in sales, attributed to consumers revived interest for self-taught home improvements as they spend more time at home.
On Monday, Africa’s leading retailer Shoprite also announced a huge dip in alcohol recording a tough 21.8 percent plunge, the company sighted the recent halt in alcohol sales as a major source for this fall.
In a statement released on the same day, the group announced that Covid -19 related costs amounted to approximately R180.1 million.
Here again, however the group still manage a total sales increase of 4.7% at R83. 4 million, with the highest peak from their furniture division, with a 15.7% increase at OK furniture thanks to the newly enthused DIY home owners.
Checkers, Checkers Hyper reported a 5.6 percent growth while Shoprite and Usave sales grew by 5.6 %.