Grocery giant finds growth in Australia after restructure

European grocery giant Spar International has managed to find some growth in Australia’s competitive supermarket sector following an internal spar, supermarket, restructure overseen by former Metcash boss Lou Jardin.

SPAR Australia posted a 13.8 per cent increase in sales to €200 million (AUD$308m) for the year ended 31 December, according to accounts published by the international grocery business overnight.

It comes after several years of decline for the business locally, with sales down 2.2 per cent in 2016 and 0.5 per cent in 2015.

The turnaround follows an internal restructure kicked off by Jardin last year, aimed at making its network of around 130 independents more competitive amid ongoing investment in price by the major supermarkets.

A full review of product range across the network was undertaken as part of the restructure, which has seen SPAR private label products become increasingly important to the business.

International buying synergies are also being realised in partnership with the parent business in Europe and particularly Asia.

Sales per square metre were also up, driven by efforts by independents to modernise their stores.

The business is now looking to expand in Australia and has been opening in new cities over the last twelve months.

The result was achieved despite ongoing investment from Australia’s major supermarkets, which has put pressure on smaller players like Spar and Foodworks in recent years.

Spar Australia’s parent has placed an increased focus on the Asia Pacific region and is now operating in six countries, including China where there are now 408 stores.

Worldwide sales increased 5.3 per cent in 2017 to €34.5 billion (AUD$52.4b). Tobias Wasmuht, CEO of Spar International, said the result was “extraordinary”.

“2017 was an extraordinary year of growth for SPAR Worldwide, with sustained growth across all 48 markets where SPAR operates,” he said.

“A key focus throughout 2017 has been to grow our presence through targeted expansion, and to drive retail development through expanding our multi-format retail strategy.

“Operationally we are stronger as a result of investments in the supply chain and are generating more value through better buying and leveraging our growing scale in procurement.”

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