1. Publication date:
June 2019
Next publication:
March 2020
SWOT Report

2. SWOT Strengths Strategy Relationships Growth Operations Offering
Independent retailers equipped to customise product offering to retain and attract customers
Strategy
Strong focus on service departments
Refined strategic direction providing clarity to all stakeholders
Relationships
Growth
Masters of the independent retail member relationship
Power of independent retailer vested interest
Strong collaborative supplier and store community relationships
Second largest retailer by turnover (i.e. sales out of till) in South Africa
Intimacy and care of independent pharmacists, with established loyal customer base
Solid double-digit growth in TOPS (sector leader)
Retail Toolkit exclusive to SPAR, with success of Fresh Studio and other in-house apps
New store growth i.e. SPAR Express almost doubled
Gross profit growth ahead of turnover growth
Knowledge sharing with SPAR International
Increased operating profits due to expense good expense control
SPAR culture
Continuous investment through organic (refurbishments) and acquisitive growth (S Buys)
Operations
Controlled internal inflation in line with intent of positioning SPAR as price competitor
Have a dedicated KAM per DC / Inland & Coastal
Increased private label participation (Market Leader in SA
Bulk of CAPEX invested into expanding and maintaining operations
Growth in value-added services (an efficient profit mechanism)
Ongoing investment in DC infrastructure and IT
Diversified revenue stream: SPAR Ireland, Switzerland and expansion into Sri Lanka
Increased local sourcing with roll-out of emerging farmer hubs
Growth of pharmacy fuelled by purchase of pharmaceutical wholesaler, S Buys
Offering
Highly integrated supply chain - stock + availability + distribution
Diverse range of relevant trading formats, across the LSM spectrum
DC controllers full sight to data
Dealing with store owners / decision makers

3. SWOT Strengths cont. Shopper Marketing
Aspirational across LSMs 1 to 10
Building brand equity and loyalty through emotional engagement and excellent understanding of the SPAR shopper
Strong customer loyalty and engagement through MySPAR Rewards Loyalty Programme and SPAR TextMe
Targeted promotional calendar with focussed shopper engagement mechanisms
Theatre of shopping - ongoing store refurbishment and optimization programme
SPAR Insights
"The potential and magnitude of our purpose will be established as the true north for our business. I am confident because it is in our DNA, it's what we do.” Mike Prentice, The SPAR Group Ltd Marketing Executive

4. SWOT Weaknesses Growth Operations Shopper Marketing
Independent retailers buying out the system
Dilution of independent retailer focus due to multi-owned stores
High cost of entry
Operations
Inconsistent implementation of strategy / operational execution across non-catman stores
Supply chain constraints, especially during promotional periods
Resource hungry account for suppliers to service effectively
DC pricing model (Member loyalty)
DC pricing undermined by wholesalers (e.g. target in Makro targeting SPAR independent retailers)
Erosion of supply chain dominance
How much longer can SPAR absorb poor performing stores?
Shopper Marketing
Catman and buyers not aligned
Shopper price perception
Digital platforms are fragmented

5. SWOT Supplier Opportunities Growth Operations
Understand SPAR trading formats - ensure best product (value and size) offered in right store format
Work with SPAR to grow the basket – exclusive value pack offerings to drive volume and price perception
Investigate products that complement and further drive fresh, deli (HMR) and bakery
Explore private label supply opportunities
Consider store volume based incentives, to drive loyalty to the SPAR DCs
Explore opportunity for fortified products for lower LSM consumers
Still possible to influence orders with store owners / managers
Opportunity to tap into convenience offering at KWIKSPAR
Operations
Engage with all three touch-points – head office, DC and store – understand the points of influence and maximise cross-functional relationships to make a difference
Identify areas of vertical co-ordination to encourage cost-reduction in the supply chain e.g. optimal buying configurations, drop shipment, backhauling and one-way loads, and supply chain mapping inter alia
Maintain robust relationships through joint business planning initiatives
Investigate how your business can integrate with the Cloud application that SPAR has introduced
If listing NPD is proving difficult, try piloting in a few stores
Get involved in SPAR regional trade shows

6. SWOT Supplier Opportunities cont. Category Management
Keep abreast of category management developments and participate in SPAR SCOPS initiatives
Subscribe to and use SPAR Insights tool for category and cluster planning
Support #SKUs Must Fall Campaign driving “ War on Waste” initiative
Suggest cross-category promotions and implement
Monitor in-store pricing compliance
Shopper Marketing
Share shopper insights with SPAR catman
Understand the different marketing requirements by region and by cluster
Understand shopper segmentation across SPAR clusters and trading brands, and respond accordingly
Collaborate to innovate on price
Explore participation in themed promotions i.e. SPAR ‘Win a Car’, Birthday and Green Tag Sale promotions
Participate in supplier collaborative campaigns
Align promotions with targeted promotional calendar
Determine the innovation pipeline for focus categories (personal care, baby and health & wellness)
Explore participation in the MySPAR Rewards loyalty programme, and media platforms such as SPARMe APP and SPAR TextMe
Look for opportunities to cross merchandise or cross
Look for social media opportunities to connect and resonate with your targeted shopper
Share insights and expertise in nutrition to help educate independent retailers and shoppers

7. SWOT Supplier Threats Growth Execution
Brand equity and growth of SPAR private label and imports
‘#SKUs must fall’ campaign
Over invest in the channel – head office, DC and stores
Execution
Retailer non-compliance with negotiated co-op and category activities
High cost to serve due to number of touch points and autonomy of each DC
Adopting a ‘one-size-fits-all’ approach to ranging
Category Management
Generic planograms results in KVI lines being squashed
Category health check automating systems no longer share of shelf based on fair share, but rather looking at profitability per square cm (like Walmart)
Shopper Marketing
Increased representation of private label in broadsheets, social media and TV adverts

8. Maryla Masojada | Lead Analyst Adrienne Osberg | Retail Analyst