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Spar aiming to bring more innovation to retail sector

INNSCOR Africa’s Spar is faring well in its targeted markets despite competition from new players in the market. The Zimbabwe Independent Business Editor Chris Muronzi (CM) this week spoke to Evan Christophides (EC), chairman of the Spar Guild of Grocers & MD of Spar Eastern Region Distribution Centre. Below are excerpts.

CM: What is Spar’s share of the retail market?
EC: It is difficult to assess as formal retail research is not conducted in this market. However, if you take information and statistics gathered from local suppliers, it would put Spar formal market share at between 20% and 30%. This obviously excludes the informal market.
CM: Does Spar intend to list or go public considering that most of Innscor businesses are listed as seen with the planned Padenga listing later in the month?
EC: This has been a consideration, but to date nothing formal has been discussed.
CM: How has Spar fared with the emergence of new retailers in the market post dollarisation?
EC: Exceptionally well in the markets that Spar has targeted. Focus remains on an all round shopping experience offering value for money, full product offerings and fresh service departments
CM: What are some of the challenges Spar is facing as a business?
EC: Spar faces similar challenges as all businesses in Zimbabwe, which include irregular power supply, capacity constraints, lack of liquidity in the market to fund expansion and lack of specialised retail skills,
CM: Have disposable incomes improved judging by sales figures?
EC: This is difficult to assess, but Spar has seen an improvement in sales by offering a wider range of well merchandised products, with particular focus on the popular Spar branded products, both local and imported.
CM: What is Spar doing to stay ahead of the retail pack?
EC: Our focus and strategy going forward is multifaceted, but will aim at delivering new innovation in retail stores, like the Spar Express format just launched, new technologies and consumer offerings like in-store smoothie bars, noodle bars, loyalty programmes, retailer training especially in our service departments and the ongoing development of Spar private label products, to name just a few of our exciting initiatives.
This coupled with strong targeted marketing and promotional activities which look to focus on aspects of healthy lifestyles, children and sport, will see our brand grow.
CM: How many Spar shops does Innscor directly run in the country?
EC: In Zimbabwe, Spar was licensed in 1966, and is made up of 10 corporate stores and 70 locally owned independent retailers across the county.
The retailers apply to become members of a Guild of Spar Grocers, who in turn elect a Guild committee
annually made up of retailers and wholesalers to administer and protect the interests of the Spar brand and its member retailers.  Guild fees are paid by members into a Guild fund (Spar is not a franchise) and is administered by the guild committee, for the purposes of advertising, promotions, training and corporate social responsibility initiatives.
To elaborate –– Corporate Stores are stores owned on a 50/50 basis between Innscor and the retailer. Eight out of the 10 corporate stores are Spar stores, two are Savemor.
CM: With your Spar Express flagship at Avondale Shopping Centre you have two other dominant retailers on your doorstep, how do you think this will affect your business?
EC: We feel that our format differs from our competitors in terms of its offer, and as such, we feel both will complement each other well. Spar Express offers fresh and fast convenience and the other offer a fuller basket of a wider grocery assortment.
CM: What is Spar’s philosophy on the issue of change?  What are you doing to accommodate your customers’ needs for change in the form of cash/coins? 
EC: Ideally, we would want to provide the convenience of change to our customers, but this has not always been practical.
We sell in US dollars so our customers would prefer US dollars change in coins. These coins are not available locally. What is readily available from the banks are rand coins, which pose two problems, namely, which exchange rate to be used at the check-out (when some retailers and informal traders are still using a rate of R10 to US$1) and secondly, some banks will not accept coin deposits from our retailers.
The change issue remains contentious, so in an attempt to alleviate the frustration for our customers, we have embarked on a few initiatives.
In some stores, a debit card is
used to avoid the need to issue change, all transactions are done via the card. Some stores are offering reusable coupons. In others, rand change in coins is given at the prevailing exchange rate, which is published daily at the check outs.
In addition, Spar will launch for Christmas a Social Responsibility initiative in conjunction with Childline, where credit notes issued at the tills can be donated to Childline in
their “change a life” campaign. (Spar Zimbabwe is their main corporate sponsor).
CM: What was the outcome of your recently commissioned independent research on how Spar was perceived in the marketplace?
EC: We recently undertook extensive research around the country in an attempt to understand exactly how customers perceived the retail environment in Zimbabwe, and in particular, their views on retail brands and Spar.
Without giving too much away, our strategy going forward focuses on what our consumers are telling us and will target marketing initiatives which aim at retail expansion, innovation, viral marketing,  strong family values, private label and most importantly, remaining relevant to our consumer demographic. Our promotions too will focus on the adage, ”More is More”, giving much more to many more people…
CM: How many new jobs have been created with the launch of the Spar Express stores in particular and also across the country with other Spar openings?  What training have they undergone?
EC: Spar has opened 12 new stores in the last 18 months, two of which were our flagship Spar Express formats in Kensington and Avondale shopping centres (Harare), with another 10 to be launched by June 2011.
These new stores have created over 600 new jobs at both retail level, and within our distribution business. Training, which is key to our success going forward in terms of specialist skills development, takes place at both our training academy and in established stores.
We have also managed to attract back to Zimbabwe some of our lost retail skills who had moved to South Africa over the years –– they have brought back a wealth of retail experience and skills, which they now impart on their fellow peers.
CM: How does Spar differentiate itself from  other supermarkets?
EC: By nature of its independently run model, Spar retailers tend to give customers a more personalised in-store service with focus on food areas like butchery, bakery and daily fresh produce. Shopping at Spar is about convenience freshness, quality, range and more focussed services.
Our independent retailers identify with their local communities and this provides a catalyst for loyal Spar customers.

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