South Africa's Spar Group has said that both its domestic and Europe-based operations have been hit hard by the coronavirus pandemic, saying that it expects the remainder of the year to be 'extremely challenging' in all markets.
Announcing its six month results to the end of March, in which it saw group turnover rise by 10.1%, but operating profit fall 3.4%, Spar Group said that the pandemic has created a 'real risk' to retail sales, and consequently to its wholesale business.
'This situation will be further aggravated by expected economic slowdown, possible increases in unemployment and additional pressure on already financially-constrained consumers,' it said.
In its home market, the group said that the parts of the business most heavily impacted were its Build It and TOPS operations, which were required to close in line with local lockdown measures.
In the previous financial year, these operations represented 21% of turnover in its Southern Africa operations.
In Ireland, its value centres and foodservice business have been 'severely impacted' by the temporary closure of the HoReCa industry, adding that it is undertaking financial arrangements with hospitality businesses and symbol retail operators to assist with he settlement of trade accounts.
In Switzerland, the closure of the hospitality sector has also had an impact, however its store estate has experienced 'increased business activity' since lockdown measures were introduced, with consumers shopping more at local convenience stores.
In Poland, meanwhile, where Spar Group is undertaking a restructuring of the recently-acquired Piotr i Pawel business, lockdown measures have delayed the resumption of normal trading operations, it said, 'with adverse effects on both retail and wholesale performances reported during and after the
'Assess The Consequences'
Spar Group added that at this stage, it is 'not possible' to estimate the full economic or business impact of the pandemic, and that management will 'continue to assess the consequences on an on-going basis'.
The group opened a net 322 new stores in the six-month period.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.