Spur Corporation’s rollout of new restaurants in small towns is in full swing, with 25% of new outlets planned for this year opening in areas that have had limited penetration by its brands.
The company has opened 11 smaller formats of its popular Panarottis pizza and pasta eatery in towns such as Mashishing (formerly Lydenburg) in Mpumalanga, Vryburg and Zeerust in the North West, and Thabazimbi in Limpopo in the year to June.
Spur Corporation CEO Val Nichas said the outlets are smaller than those in bigger cities.
“As we look for space, we want to reach nodes where there is consumer spend. There are developments in certain towns, and that means job creation and income. Also with every new restaurant that is opened, we are making a positive contribution through employment,” she said.
Of the 47 new stores planned for this year in South Africa, 25% will be mini Panarottis and Spur restaurants. Nichas said Panarottis is a more affordable brand to set up. Spur is the biggest contributor to the group's turnover while Panarottis represents 10%.
“We had a vision on Panarottis ... to be the place in South Africa where people eat pizza at the table in an unintimidating, welcoming and affordable (place). I really believe the vision for this brand is starting to unfold and we see a great future of Panarottis in our network, not only in South Africa but also in the rest of Africa.”
The rollout of mini Spur restaurants, which will also feature small play areas, has started, said Nichas.
Our brands have definitely not reached saturation levels in South Africa
— CEO Val Nichas
The group’s restaurant footprint passed the 700 mark during the year under review. In South Africa, 27 restaurants were opened and nine were closed. The Doppio acquisition added 25 of those restaurants to the stable, 10 Piza e Vino outlets, and one Modern Tailors, bringing the South African restaurant count to 603. Modern Tailors, specialising in Indian cuisine, opened a second restaurant in Groenkloof, Pretoria, a few months ago.
Nichas said Modern Tailors would likely have about six restaurants. “We are still trying to work it out. We think it will be a small chain with five or six. Maybe they won't be franchise. They might be company-owned, we're not sure yet. Obviously, we have the first two that we've got to refine and establish the brand equity.”
Piza e Vino's positioning in the market is also being reviewed, “We are setting the future direction and defining where that brand is going.”
Four new Doppio Zero will also open in the coming months, expanding into new regions such as Cape Town, Polokwane, and Botswana, she said.
“Our brands have definitely not reached saturation levels in South Africa and the newly acquired Doppio Collection presents attractive expansion opportunities. We will continue to focus our strategic growth on the continent of Africa,” said Nichas.
Spur Group's international store network increased to 98 across 14 countries after the opening of 12 restaurants in other parts of Africa. This includes the addition of one outlet through the Doppio acquisition and the closure of four restaurants on the continent. Two underperforming RocoMamas stores in Saudi Arabia were closed and the group exited the Middle East. Operations outside South Africa, including Australia, Mauritius and other countries in Southern Africa contribute 10% of total turnover.
In the year to June, Spur Corporation increased headline earnings by 10.8% to R236m, delivering a strong performance in a volatile trading environment due to mounting pressure on consumer disposable income.
Revenue rose by 14.1% to R3.5bn, supported by stronger franchised restaurant turnover, increased sales from the manufacturing and distribution division, and higher sales from retail company stores.
Nichas said volatile trading patterns were a feature of the financial year to June.
“After strong trading in the first quarter, the second quarter was marked by slower trading until our restaurant sales were boosted by robust trading in December 2023. Slower trading volumes continued in the second six months, although we experienced a positive upturn in June 2024 during the midyear school holidays.”
Spur’s loyalty programme continues to attract customers with 1.1-million new additions, resulting in a record high 3.1-million active Family Club members in the financial year to June. Nichas said the Spur brand's voucher redemption rate of 78% is “evidence that consumers are seeking value and rewards for their strained disposable income”.
Spur has partnered with Old Mutual, Sasol, Vodacom and Capitec, who have added the group's chain of restaurants to their rewards programme. “What is starting to show is that Spur is a very appealing reward mechanism hence the attraction of these strategic alliance partners,” said Nichas.
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