SPAR's sales rise, but liquor stumbles after alcohol ban

Grocery retailer SPAR Group said on Tuesday group sales rose by 9.8% in the 18 weeks ended January 29 but the country's ban on alcohol hit liquor sales, sending its shares down more than 5%.

SPAR, which has more than 4,300 stores across Southern Africa, Ireland, Poland and Switzerland, said group sales rose to R42.99 billion from R39.15 billion in the previous corresponding period.

South African retailers had largely soft trading at Christmas and in "Black November", an extension of Black Friday when retailers offer discounts, as shoppers spent less on groceries.

Total sales in Southern Africa, SPAR's largest market, which include grocery, liquor and building materials, rose by 3.4%, reflecting weaker consumer spending and lost liquor business, the retailer said.

Its core SPAR grocery business in the region increased sales by 2.8%. Liquor sales fell by 17.9%, adversely impacted by the ban on the sale of alcohol in South Africa imposed late in December as part of COVID-19 lockdown restrictions.

By 0935 GMT, shares in SPAR were down 5.53% to R199.89 rand, on track for their biggest daily fall in 10 months.

The retailer's building materials and do-it-yourself "Build it" chain was the star performer, with sales up by 25.6%. Demand for construction products remained strong, driven by spending on home improvements as consumers stayed at home due to the pandemic.

The group's business in Ireland reported strong growth across all retail brands.

A recently acquired retail business in Poland proved vulnerable to the lockdown curbs, disrupting growth plans, but still increased turnover by 38.1% in local currency and 48.8% in rand terms.