1932 – 2012 Where People Make the Difference SPAR International Annual Report 2011 Contents Managing Director’s Overview SPAR achieved outstanding growth in 2011 driven by our worldwide network of SPAR partners and 01 Managing Director's Overview independent retailers. This continues our excellent 08 SPAR International Board growth pattern during the global recession with a SPAR, Where cumulative retail sales increase of 16% over the last Success Stories: three years. 12 New Country Development People Make 14 Investing in our Supply Chain Consumer confidence remained low during 2011. This 16 Retail Formats driving Growth the Difference was driven by continued high levels of unemployment 20 Convenience Retailing at SPAR and concerns about savings and pensions. In addition, 22 Sports Sponsorship and SPAR wages remained under pressure as many governments 24 People Making the Difference 2011 was another good year implemented austerity packages which included higher 28 Customer Centred Innovation for SPAR. We are pleased to levels of taxation. 30 SPAR Working with Local Growers 32 Delivering Value to our Customers report our growth continued These factors, together with rising fuel prices, resulted in with SPAR worldwide retail reduced levels of disposable income and consequently, 34 SPAR Worldwide food expenditure remaining static or even declining in sales growing by €1.36 billion the majority of our markets. Competition intensified 50 SPAR Partners Worldwide to reach €31.1 billion, an with both national and international chains fighting for 52 SPAR International Action Groups market share. This resulted in increased promotional 53 Statistics 2011 increase of 4.6% on the activity and a strong focus on everyday low prices. previous year. Eighty years SPAR responded to the needs of our customers by after our foundation people placing a focus on fresh, convenient, value shopping in an exciting modern retail environment. The increase of continue to make the 4.6% in turnover to €31.1 billion is an excellent result in difference in SPAR. this very challenging trading environment. Dr. Gordon R Campbell, Managing Director, SPAR International SPAR International Annual Report 2011 1 Managing Director’s Overview There are now SPAR retail operations in 36 extended SPAR private label ranges. These include the Strong Growth in Key Strategic New Markets countries on 4 continents with the first SPAR stores launch of the SPAR Premium range in Italy and Austria, Dramatic increases in retail sales were achieved in opening in the United Arab Emirates, Malawi and the extension of S-Budget in five markets and its launch the key strategic new markets of China, Russia and Mozambique during 2011. Western Europe remains in Ireland and the UK. The launch of SPAR Sensations, India. SPAR International continues to support the The Performance the core SPAR market accounting for 65% of a health and beauty range, had a positive impact on SPAR Partners in expanding their retail and distribution worldwide retail sales. Eastern and Central Europe retail sales in Spain. operations as well as recruiting new partners. of SPAR in 2011 (15%) and Southern Africa (16%) are of increasing significance while the Asia pacific region (4%) is Eastern and Central Europe Growth accelerated in China in 2011: 25 new showing strong growth. Although economic conditions remained very difficult in hypermarkets and 25 supermarkets were opened, Retail Sales €31.14 billion Eastern and Central Europe we are pleased to report and although most of the new openings were in the Europe that sales increases were achieved in all countries. second half of the year, retail sales increased by 77% to Sales Increase 4.6% SPAR performed well across Europe with excellent sales SPAR Hungary and SPAR Slovenia celebrate their 20th €716 million. results in our larger markets including Italy (+6.2%), anniversaries with sales increases of 2.2% and 2.8% Sales Increase 3 Years 16.0% Austria (+4.5%), Belgium (+3.9%), Spain (+2.8%) and respectively. The Czech Republic (+5.3%) and Croatia In Russia retail sales grew by 21% to €935. Three the UK (+3.1%). Sales growth was driven by a number (+13%) also had positive results. new partners joined SPAR Russia, opening stores in St of factors, but the most important were new store Petersburg, Chelyabinsk and Krasnoyarsk in December. SPAR Countries 36 openings and the redevelopment of existing stores. Southern Africa This included the first SPAR hypermarkets in Russia. For example, SPAR Austria opened 89 new stores, SPAR South Africa had another excellent year. Retail Further new partners will be added in 2012. Stores 12,124 including their first city convenience stores, continued sales increased by 9% to Rand 47.2 billion (€4.6 billion). the rollout of SPAR Express, and upgraded 100 SPAR As in Europe, growth was achieved through new store Growth also accelerated in India; with a total of 10 Sales Area m² 6,440,853 stores. SPAR Italy opened 2 new hypermarkets and 19 openings and a strong focus on redeveloping and hypermarkets sales grew by 45% to €65 million. large EUROSPAR supermarkets. expanding existing stores. 25 new stores were opened and 126 upgrades completed. SPAR Australia underwent a great transformation in The SPAR multi format retail strategy played a key role 2011 with new ownership and new management. Retail in sales growth with a move into convenience retailing SPAR Zimbabwe continued its strong recovery, sales increased by 16% and there are good prospects in city centre and petrol forecourt stores in a number of opening a number of large Flagship supermarkets, for future growth. SPAR countries. Consumers are making less shopping and achieving a sales increase of 20%. Botswana and trips and prefer to shop nearer to home. Namibia delivered strong growth and Zambia made SPAR made a strategic move into the Middle East. good progress. The first supermarkets opened in The first SPAR supermarket opened in the United SPAR private label sales grew as a proportion of total Malawi and Mozambique. Nigeria opened its second Arab Emirates in Abu Dhabi. The UAE will provide the retail sales in all SPAR countries during 2011. Of large SPAR supermarket. platform for further expansion in this region. particular importance was the launch of new and 2 SPAR International Annual Report 2011 SPAR International Annual Report 2011 3 Managing Director’s Overview 80 Years of SPAR SPAR, Where People Make the Difference BWG Foods, operators of SPAR in Ireland, own the As we enter 2012 we begin to celebrate the 80th People have been making the difference at SPAR for fifth UK wholesale company Appleby Westward, which anniversary of the foundation of the unique SPAR more than 80 years. The core competitive strength is based in the South West of England. BWG Foods partnership. Founded in The Netherlands in 1932 by of SPAR has been the free and open exchange CEO, Leo Crawford, serves as Chairman of SPAR 80 Years of Adriaan van Well with the slogan “Door Eendrachtig of knowledge and information between the SPAR International. Samenwerken Profitieren Allen Regelmatig” – countries. This exchange has been actively facilitated People Making through joint co-operation all benefit. over the years by the dynamic leadership of many SPAR In Spain, Managing Director, Ángel de la Torre, has partners through our International Board, at the annual worked ceaselessly for SPAR at wholesale, retail and the Difference The SPAR system enables retailers to work together International Congress and through our many working central office level since 1959. He has given 53 years of purchasing from their regional Distribution Centre, parties and seminars. dedicated service, and continues to drive growth in an sharing all the advantages of joint buying, national extremely difficult market. We celebrate 80 years of SPAR promotions, and private label. The SPAR retailers can And today in SPAR people continue to make the in 2012. Our founder, Adriaan focus all their attention on their customers’ needs difference. The Reisch, Drexel and Poppmeier families, South Africa has played a very active role in SPAR so that at SPAR our customers can be treated as an founder members of SPAR Austria, continue to drive International. This year they host the 57th International van Well, had a vision that if individual by an individual. growth in Austria and the Aspiag countries, with total SPAR Congress. Their CEO, Wayne Hook serves on the retailers worked together in retail sales in excess of €12 billion. Three generations International Board, and his predecessor Peter Hughes This partnership has given SPAR a unique competitive of the families have given service to SPAR Austria, was a long term member of the Board. partnership all would benefit. advantage and has driven the expansion of SPAR first Aspiag and SPAR International and contributed to the Could he have imagined that throughout Europe and then into developing markets. worldwide success of SPAR International. In Norway the Johannson family has been a very active today SPAR would be the It has enabled our new partners in emerging markets supporter of SPAR. NorgesGruppen Chairman, Knut to learn quickly and to introduce modern attractive The Board of DeSPAR Italia under the leadership of Hartvig Johannson has served for many years on the world’s largest voluntary retail retail store concepts and to introduce state-of-the-art Mr. Gatto have driven strong growth in the last decade International Board. chain? supply chains. and will accelerate their expansion further with the recruitment of five new partners. They anticipate 350 The new SPAR partners are also making a difference SPAR is the world’s largest voluntary retail chain with new stores and a sales increase of 20% when all the participating actively in our conferences, seminars and 12,124 stores in 36 countries. Together with our new stores are integrated into SPAR formats.