Background and strategy development process summary

The SPAR supermarket strategy for South Africa was developed and approved by the board in 2018. This followed an extensive and inclusive stakeholder process that considered major shifts for SPAR over the past few years:

  • We acquired businesses in different territories
  • We entered new categories, such as pharmaceuticals
  • We had leadership changes
  • Our markets evolved through heightened competition, economic and political challenges as well as consumer shifts, driven to a large extent by technological advancements

The SPAR supermarket strategy directs our focus and helps us appropriately respond to a dynamic trading environment. We describe these changing environments in the three operational reports for South Africa, Ireland and Switzerland. Through our strategy we are living our purpose: to inspire people to do and be more.

Our South African supermarket strategy at a glance

By living our purpose, we aim to achieve three key overarching outcomes that define how we create value.


  • SPAR stakeholders benefit from being part of the family
  • Interests of stakeholders are well balanced to ensure the entire system is sustainable in the long term
  • “Value” refers the broad range of benefits we deliver to stakeholders, inter alia, financial returns, creation of opportunities, empowerment, etc.

  • The SPAR brand has a strong emotional connection with stakeholders
  • We are respected for the difference we make in South Africa and our communities
  • We are respected for our strong ethics
  • Stakeholders want to be and enjoy being associated with SPAR

  • Southern African consumers have more access to affordable food
  • South Africans’ nutritional needs are met as a result of SPAR’s work in this space
  • We made a positive impact on the health of southern African consumers, especially in areas related to healthier eating habits

Creating a culture of implementation

The effective implementation of the SPAR supermarket strategy requires a different culture and mindset for employees and retailers.

  • Work towards outcomes, not milestones
  • Agile – think and act quick, fail fast, course correct
  • Integrate risk thinking into ways of working
  • Systemic thinking – how the system works, how my actions influence others and unintended consequences
  • Inclusive communication is critical – particularly between focus areas
  • What will we do differently from what we are doing based on these recommendations?
  • Are the recommendations in line with achieving SPAR’s overarching purpose and strategic outcomes?
  • How do our recommendations align with our values?
  • How does the proposal work and engage with other focus areas?
  • From profit to purpose
  • From hierarchies to networks
  • From controlling to empowering
  • From planning to experimentation
  • From privacy to transparency

Governance and oversight of the SPAR supermarket strategy

In the past year, we appointed a team dedicated to each focus area. Team leaders are members of executive management, supported by team members who are qualified to drive the defined outcomes according to set timelines. Teams are diverse and cross-functional, combining employees, retailers and wholesale representatives. With defined outcomes to deliver, teams have the freedom to chart their paths – there are no prescribed processes or plans to follow.

A Steering Committee serves to co-ordinate activities and interdependencies between focus teams. The Steering Committee oversees activities, breaks down barriers or resolves issues, and takes accountability for resource allocation.

Progress is tracked through executive and SPAR Guild directors’ meetings where the strategy facilitation team reports back. The strategy facilitation team has monthly meetings with focus team leaders to provide support and monitor communication and change management initiatives.

Progress on strategy implementation is on the agenda of every board meeting. We are exploring software options to provide a dashboard, with key performance indicators for each focus area in development.

Risks to the successful implementation of the strategy include:

  • Resources: team members work on focus areas in addition to their daily jobs and responsibilities
  • Dealing with new and unknown focus areas: change management interventions help employees understand the need for change
  • Amount of time: slow progress in some areas due to capacity constraints and lack of data/research
  • Accepting failure and trying again: we need to build tenacity based on commitment
  • Leadership buy in: visible role models play in important part in embedding the commitment to and understanding of outcomes
  • High level of buy-in and excitement: people want to get involved
  • Time and task management: employees need support in knowing where to start, when to wait and when to take risks

“A key factor for success was the inclusion of retailers to assist the process from a ground level point of view. The main highlight through these discussions is SPAR not only seeing the retailer as their customer but the end-consumer. That is an absolute win whereby we are all inclusive in satisfying customer needs. Understanding of our consumers was quite important. Even though we may think we do, this exercise highlighted that there is so much work to be done. The way we allocate our advertising spend is critical.” – Roy Sheodin, SPAR retailer

Strategic focus area progress for 2019

We are in the developmental phase of our strategy: allocating resources, defining measurements and starting to report. This is an interactive process to refine our focus areas and determine potential impact. This year, our focus area teams put the basics in place.

In this focus area, we are working on:

  • defining and implementing our talent management framework;
  • strengthening and enhancing our culture; and
  • defining the SPAR organisation of the future.

In this area, we are working on:

  • developing an efficient and resilient supply chain;
  • enhancing and developing excellence in our fresh offerings;
  • promoting nutritious food offerings; and
  • deepening our interactions with the informal food economy.

We are working on increasing the diversity of:

  • suppliers;
  • employees; and
  • retailers.

We are working to:

  • review our brand essence and architecture;
  • update our house brand strategy in line with our architecture;
  • review our marketing, branding and execution; and
  • update our SPAR rewards strategy.

We are working to:

  • develop solutions to address key challenges in the model;
  • review our service offerings to retailers;
  • modernise and drive the “rules of the game”; and
  • embed the capability to run profitable retail stores.

We are working to:

  • clearly define consumer segmentation for SPAR;
  • review and align offerings to consumers by segment; and
  • drive innovation and new business in line with consumer insights.

Our strategies in other territories

An overarching group strategy will be developed, serving to align strategies in different territories.

Six strategic plans for Ireland

BWG works according to a strategic plan 2016 to 2021 aimed at shareholder value creation through six specific plans as follows:

1. Distribution

Specific imperatives include a strategic review of the BWG supply chain for channels to stress test distribution and minimise costs. We developed optimisation plans for the distribution centres to assess capacity, productivity and service levels to improve capacity management and reduce working capital. A transport optimisation plan was developed to refine asset use and reduce costs.

2. Information technology

The information technology plan focuses on more efficient and lower-cost infrastructure upgrades, standardisation and redesign. We developed an e-commerce strategy to address online, mobile and integrated solutions. Further imperatives include software consolidation, social media and business intelligence capabilities.

3. Acquisitions

The acquisition plan is based on growth aspirations, shareholder support and management expertise. Targets were identified and explored to retain strategic retail business. A further imperative is retaining and developing strategic categories.

4. People

The top imperative for the people plan is to refine the management structure based on succession planning and talent requirements. Further focus areas include the e-learning academy, strengthening the company culture through feedback programmes and training to ensure greater productivity and efficiency.

5. Property

The property plan is a long-term imperative aimed at enhancing profitability and reducing liabilities. It considers asset valuations, disposals and the development of an intellectual property management mandate for the business.

6. Retail

Our focus is on developing a multi-brand strategy for different store formats and to drive SPAR as the leader in the convenience market over the long term. The plan also addresses the EUROSPAR brand strategy imperative and considers innovation to grow margins.

Read about activities supporting these plans for 2019 in the operational report: Focus on Ireland.

Strategic outcomes for Switzerland

Adopted in February 2017, SPAR Switzerland’s strategy features the following elements:


Enable retailers to profitably meet their customers’ individual needs


Convenience brand of choice for the customers we serve


Trust, passion and entrepreneurship

The following action plans shape SPAR Switzerland’s operations towards six outcomes:

1. The best employees

We aim to motivate and empower employees through our culture, values and processes. We focus on improving communication, providing competitive remuneration, talent management, training and apprenticeships.

2. World-class supply chain

We focus on supply chain optimisation through supplier engagement and relationships to reduce costs and increase quality. This includes logistics efficiencies and productivity improvements.

3. Customised range

We focus on category management through an assortment geared toward customers. This also informs new product development.

4. Competitive pricing

We balance pricing with retailer profitability through marketing and promotions, and by optimising our store portfolio.

5. Loved/trusted/believable brand

We focus on targeted sales and marketing activities, including our rewards programme.

6. New business growth

We focus on expanding our footprint through new sites and stores, and by using technology.

Read about activities supporting these plans for 2019 in the operational report: Focus on Switzerland.

The link between strategy, governance and risk

The SPAR board believes there is an inextricable link between strategy, risk, sustainability and performance management, effectively measured and controlled through the enterprise risk management process. Therefore, the successful implementation of the strategy relies on the effective mitigation of strategic risks.

The board, supported by the Risk Committee, implements effective policies and plans to mitigate these risks and to support the company in being ethical and a good corporate citizen.

In developing the strategy and overseeing risk management, the board provides overall guidance and direction, including approving and monitoring progress. The South African executive team and management provide structure for both processes and input into risk and strategy discussions by considering past performance and a changing operating landscape. Progress against the strategic focus areas and an updated risk register form part of the quarterly reports to the board and relevant committees.

The board’s role in considering and approving strategy includes, inter alia, ethical leadership which evaluates the trade-offs between different stakeholders ensuring progress is measured and monitored. To enable the latter, the board approves policies, frameworks and the plans that drive budget allocation.

The risks outlined below were identified and ranked as the top 12 risks most likely to impact the business. The risk register links key risks to strategic imperatives and identifies key risk indicators tracked to determine likelihood and impact. These risks are monitored and managed at board level. To strengthen accountability and mitigate the key risks identified, detailed action plans with clearly defined roles and timelines were developed.

The summary below tracks strategic risks, identifies mitigation plans and show the trend movement:

Increased movement in rank with comparative ranking in 2018

Decreased movement in rank with comparative ranking in 2018

Unchanged movement in rank with comparative ranking in 2018

Rank Risk title Description Mitigating plans

Major customer groups may negatively influence the sustainability of the business

Large groups of retailers may have a proportionally large influence on the profitability, reputation, relationships and standards of specific distribution centres. This might lead to the potential loss of a significant percentage of business. We identified key risks per major customer group and documented an action plan to address these.

Macroeconomic factors may cause a decline in business

Factors include global and macroeconomic conditions such as inflation, currency depreciation and unemployment. Medium to long-term mitigation strategies include forward cover and stockpiling fuel. We track and report trends according to indicators and set thresholds, for example, for the Rand exchange rate and the oil price.

Poor individual retailer performance may negatively impact the group

This can have a wide spectrum of impacts, including reputational and financial through subpar stores, price perceptions, store viability, group profitability and efficiency.

Further drivers are increasing working capital constraints at retailers because of poor financial management by individual retailers. Poor performance includes retailers not being meaningfully or sustainably involved in the communities they serve, thereby not living the SPAR vision.

We drive increased financial disclosure and benchmarking for retailers while offering training and support.

We actively manage the list of poor-performing retailers per region and identify appropriate and specific action plans to address performance.

We have increased the audit of core retailer (business) processes.


Political instability in SPAR markets may hinder business

National or international political events can cause fundamental shifts in the country’s economy. We receive regular political insights from knowledgeable commentators who assist in creating scenarios to determine the potential impact on our future business.

New and existing competition may take market share

This aggressive competition includes foreign or local new entrants, with expanded domestic competition by current retailers – for example, competing on range, price and hygiene factors.

We developed plans for strategic stores and identified market share gaps.

We developed a clear emerging market strategy for each region.


Loss of retailers and retail stores to competitors

Competitors target SPAR retailers to buy stores with unrealistic or extravagant offers. We identified unique actions to improve our relationship with each retailer, based on an analysis of each retailer’s specialist support needs. Vulnerable stores are indexed and tracked.

Poor adherence to and implementation of group initiatives by retailers

Resistance and lack of buy in and discipline by some retailers may result in an inability to market our offerings on a national basis, resulting in financial and reputational damage. We conduct and document robust pilots for new concepts as references for the rollout to retailers. Regional committees list mandatory initiatives, conduct audits and report on retail compliance with documented remedial actions for non-compliant retailers.

The inability to develop new sites may stunt growth

Acquiring new sites is fundamental to our growth strategy. Barriers include guild approvals, objections by other retailers and other competitors owning property.

To drive new business, we identified new business champions per region with action plans. We developed a group developer engagement and funding strategy.

We also identified retailers per region with the desire and capacity to own multiple stores.


Inability to attract new retailers stunts growth

We face issues such as lack of attractiveness to entrepeneurs and potential black retailers and desirability of the retail model. We have identified strategies and plans to attract new retailers, in particular black retailers.

The financial model may fail to ensure retailer profitability, thereby jeopardising SPAR’s sustainability

Retailers may be unable to make sustainable and acceptable profits, which threatens the wholesale model. Retail margins are under pressure.

We identified key actions to reduce costs or enhance revenue within retail in the regions. We determine the true cost and profitability for SPAR and retailers across the value chain for a selected basket of goods.

We identified key drivers impacting the wholesale/retail model, including the impact of cross-subsidisation and shared costing for retailers and SPAR.


Disruption of operations may occur due to labour disputes and/or industrial and mass action

Labour unrest may be caused by a spillover from related industries such as transport, or the unsatisfactory resolution of central bargaining and outsourcing issues or retail strikes with empathy from SPAR employees.

We have identified unique actions to improve relationships with unions and employees, including improving the capacity of shop stewards.

We have strike contingency plans detailing responsibilities and expectations.

We conduct an annual comprehensive climate survey at sites.


Lack of transformation at leadership level including retail creates a liability for SPAR credibility, brand and reputation

Transformation is slow, especially in senior leadership. Lack of black retail leadership is also an issue.

We updated our transformation plan based on the new broad-based black economic empowerment codes and are executing according to a carefully thought out strategy.

We educate retailers on new requirements regarding transformation and assist them in improving their BBBEE ratings.

We remunerate for success

SPAR’s employees are pivotal in achieving our three strategic outcomes, for living our purpose and managing our risks. Their actions and how they work determine our success.

SPAR is committed to paying fair, competitive and market-related remuneration to ensure that we attract and retain top-quality and talented employees. Our remuneration policy guides the board to acknowledge the contribution of individual employees, based on performance reviews considering key indicators, and reward them for achieving targets.

We pledge to create shared value

SPAR creates value on a global scale through our voluntary trading model and convenient delivery of fresh food and groceries to stores located where people live.

We rely on relationships to create value. We explain our material relationships here. They are essential for our business activities and help us mitigate risks, including wastage and resource depletion, associated with distribution and wholesale businesses.

We create value for stakeholders. For example, independent retailers benefit from the economies of scale gained by our buying efficiencies. These include cost and resource savings through operational efficiency and a wide scope of products offered and distributed through our distribution centres.

Retailers further benefit from our merchandising expertise, support services and benchmarking, which enable them to offer a wide range of products at competitive prices in the format or scale that they prefer. Voluntary trading further equips retailers with the ability to customise their product and service offering to be responsive to their local, niche consumer segment’s needs and expectations. This unlocks value for retailers and consumers.

Our sustainability pledge is to create authentic shared value though the following outcomes

SPAR’s business model is based on interactions between our business, our customers and our communities. As we are mainly a wholesale and distribution operation, our suppliers form an essential part of the business model, and our supply chain constitutes the core of what we manage.

Find key facts about our distribution centres here.



Our main output is a product range that covers the food and grocery shopping needs of all income groups in all territories. Store mixes are determined by the retailer’s positioning, changing consumer buying trends and seasonal impacts. Sales are supported by promotions, store concepts such as Beantree, home-meal replacement options and innovative and affordable SPAR house brands.

Our business depends on specialist operational expertise in managing a wholesale supply chain.

Waste takes the form of unsold goods, packaging and inefficiencies. All distribution centres have comprehensive recycling programmes for plastic and cardboard. This includes waste generated at the distribution centres and by participating retail stores.


Our board approves the strategy and monitors implementation through five committees:

Read more about the ways in which the board supports value creation here.


Revenue depends on the number of stores in operation, the percentage of goods ordered through our distribution centres and the ability of retailers to drive sales growth per store. 67.9% of revenue is contributed by the South African business.


Product cost is driven by the cost of commodities and other merchandise which we source from suppliers. Other costs include leases, fuel and transport as well as employee remuneration and finance cost.


In addition to financial key performance indicators, we typically track the following operational indicators on a monthly basis:

  • Contribution of fresh produce to turnover
  • Increased stock levels
  • Reduced input costs
  • Reduced carbon footprint
  • Tonnes of recycled plastic and cardboard
  • Food price inflation
  • Customer survey responses
  • Wholesale profit margin
  • Retail profit margin
  • House brands as a percentage of total sales
  • Loyalty programme uptake
  • Health and safety incidents
  • New retailers and stores
  • Existing store growth
  • Existing store revamps and refurbishments

Our resources

Find our fact sheet here.

The resources we use to create value

We strive to use our resources responsibly. Our purpose and sustainability pledge direct us to take accountability for all six capitals of value creation and make future-orientated business decisions that consider financial, human, intellectual, social and relationship, manufactured and natural capitals. Evidence of these decisions is described in the operational reports for South Africa, Ireland and Switzerland.

The summary below provides brief examples of our interaction with and reliance on combinations of capitals to run our business. In addition, we depend on relationships with specific stakeholders to ensure the future availability of the capitals, and to work with us to mitigate negative impacts. In some cases, we own the capitals, such as our brands or buildings, whereas others are contracted or indirectly funded, such as employees or infrastructure.

Examples of the capitals used in our business activities

The capitals we use and transform

Relationships with key stakeholders enabling the use and transformation of the capitals

We source products either locally or internationally, depending on availability and cost. These products are converted, processed, packaged and transported to our distribution centres. We rely on factories, plants and road infrastructure. Once products enter our distribution centres, they are handled according to SPAR’s inventory, quality control and order processes.

Natural, manufactured and intellectual


Our range of SPAR house brand products is developed and packaged for SPAR according to specific requirements. As these products carry our brand, they are subject to high standards of quality, nutrition, health and safety. Other products are branded by their producers and sold under third-party brands in our stores. We follow a stringent supplier selection process to ensure the quality, safety and secure supply of products.

Manufactured, intellectual, and social and relationship


Employees of our distribution centres handle, sort and move inventory according to orders and deliveries. Their activities are supported by employees dedicated to the financial, marketing, retailer services, information technology and human resources aspects of the business.

Human and intellectual


Our fleet of trucks and those in our network of suppliers form a pool to optimise delivery through drop shipments, shared loads and backhauling, thereby minimising cost and environmental impact.

Manufactured and environmental


We depend on financial capital in almost all business activities as we require funds to procure goods and services, pay salaries and tax, develop new products, invest in facilities or operations, equipment and repairs, and pay our funders and shareholders. Financial capital is used to make acquisitions, expand our footprint and deliver long-term growth.

Financial and intellectual


We form partnerships to increase the impact of our resource-saving and regeneration initiatives. We endeavour to change manufacturing, packaging and consumption behaviour related to using plastics, other packaging and water. We continuously measure progress on reducing our environmental footprint.

Social and relationship, and intellectual


We can adapt to changes in the availability, quality or nature of the six capitals through our integrated approach to strategy, governance and risk management.

Creating value through our business activities

Our business activities are similar to other companies managing wholesale and distribution businesses. What differentiates SPAR is the dynamics of the voluntary trading model, which extends our scope in terms of retail support and marketing activities.

Our business activities are interdependent and interconnected: as a system, they ensure good supply chain management which streamlines processes and results in resource savings. Read more about these activities and outputs in the operational reports for South Africa, Ireland and Switzerland.

Our business activities at a glance


Our distribution centres source goods from suppliers and sell them to retailers at a margin. Our bulk procurement creates economies of scale. Fixed costs are shared over vast volumes, thereby reducing costs per unit. Joint business planning with key suppliers targets supply chain efficiencies, including using resources responsibly.

Our support of local suppliers benefits small businesses, for example, through the rural hubs in South Africa.


We operate warehouses across our distribution centres and satellite facilities, and across various temperature disciplines. We apply advanced technology to optimise the complex process of storing vast quantities of goods for delivery. Goods are received from suppliers and unpacked into pick slots. Retailers’ orders are processed electronically and sorted for transportation.


Increasing fuel prices emphasise the importance of route management systems, truck specifications, turnaround times and driver efficiency. There is a dual strategic drive to increase our bottom line and decrease our carbon footprint. We use biodiesel as fuel, co-develop new truck refrigeration options and continuously explore ways to optimise distribution. Joint business planning with suppliers and other value chain partners streamlines processes, including backhauling and packing techniques.


We share the benefits inherent in the voluntary trading model with retailers. We encourage entrepreneurial flair within SPAR guidelines to ensure consistency. We provide a range of retail support services:

  • Store refurbishment and design assistance
  • Merchandising best practice
  • Public relations assistance
  • The SPAR development fund for retailers

Our strategic outcomes and trade-offs

We identified three main outcomes as part of the strategy development process. These outcomes consider internal or external impacts to SPAR and its material stakeholders throughout the value chain.

The outcomes are subject to deliberate trade-offs where one stakeholder’s interests are weighed against another over a given period. The voluntary trading model, for example, allows retailers to procure products from alternative suppliers or to compare supplier prices against those offered by the SPAR distribution centres. For SPAR there is a trade-off in margin to be weighed against the risk to the brand associated with products not necessarily subject to the same safety and compliance requirements as those offered by SPAR. SPAR often carries reputational risk to an extent greater than that of an individual store owner. The need for consistency in terms of the SPAR brand and stores versus the free choice of an independent owner remains a core trade-off to be managed in the value creation process.