Spur Corporation is exploring new restaurant locations locally and expanding further into the continent.
The owner of Panarottis, John Dory’s, RoccoMamas, and Doppio has opened Spur restaurants next to petrol stations, a non-traditional site for the brand. Doppio, which Spur Corporation bought more than a year ago, has secured a tender to open an outlet at MediClinic in Sandton, and will also open a restaurant in one of the Protea Hotels.
“Over the years, we’ve sort of trialed with a few Spurs next to petrol stations, although slightly smaller formats, and those were well received by customers,” said Spur Corporation CEO Val Nichas.
Spur has outlets at 12 petrol stations, a non-traditional location as the restaurant requires a bigger space. “This is the beginning of a new channel for Spur,” she said.
Our brands have certainly not reached saturation levels
— Val Nichas, Spur Corporation CEO
Nichas said RoccoMamas and Panarottis were also suitable brands for forecourts given that their food offerings can be produced fairly quickly.
With the Mediclinic outlet, Nichas said there was an opportunity for greater growth because the hospital cafes need more quick food and easy and small meals like sandwiches, and that format is more suited to Doppio Zero. “So that opens up new opportunities, and obviously you’ve got to make the first one succeed and be profitable.”
Commenting on Doppio’s entry into hotels, Nichas said: “That’s going to open up a different avenue for us. We’re always looking at alternative sites, new nodes, new places where people are looking for a meal solution.”
She said more tenders were in the pipeline for restaurants in hotels.
Moreover, Spur Corporation wants to expand its footprint in West Africa to add to its growing operations in Southern and East Africa. Last year, it re-entered Tanzania with two Panarottis outlets.
“We are transitioning in exploring new markets, new regions, and new opportunities, that’s the only way we are going to get quantum growth.”
Spur has 619 restaurants locally and 107 outside the country, 16 of which are in Mauritius, 25 in Zambia, 12 in Nigeria, 11 in Namibia, and nine in Zimbabwe. Beyond the continent, it has two restaurants in Australia and three in India. It plans to open 47 new restaurants locally and 13 internationally before the end of the year.
“Our brands have certainly not reached saturation levels,” she said.
Spur also wants to grow its e-commerce segments, which consist of Spur vouchers that companies add to their loyalty programmes. It also plans on putting more of its sauces and salad dressings in retail stores.
“So we are looking to expand, not only on range so much, but more on reach... to get into all the supermarkets, the retail stores and online.”
Sales from the product manufacturing and distribution division rose 9.9% to R1.3bn. Total restaurant sales grew 10% to R5.9bn, with the recently acquired Doppio Collection brands contributing sales of R351m. The Doppio Collection includes Piza e Vino and Modern Tailors.
The Spur Steak Ranches brand increased restaurant sales by 2.8%, accounting for 64% of total South African sales for the group. Panarottis increased restaurant sales by 14% and RocoMamas by 8.4%. Takeaway sales account for 13% of total South African restaurant sales.
Nichas said despite the sustained pressure on disposable income, the group continued to attract customers to its restaurants. While other provinces performed well, the Eastern Cape region struggled — with a high unemployment rate and a sluggish economy key contributors. “There has been quite a big negative impact. It’s a much more difficult region. We don’t have a big penetration.”
Commenting on the outlook, she said the stable electricity supply, lower levels of inflation and interest rate relief are all levers to support increased spending and confidence in South Africa. “However, this may be negated by an increase in tax rates, and in particular VAT, which impacts all consumers, as well as the recent recurrence of intermittent load-shedding.”
She expects trading conditions to remain challenging in the short to medium term, owing to continued pressure on consumer spending.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.