On Thursday, the South African grocery retailer and wholesaler SPAR Group (SPPJ.J) announced that it intended to sell its loss-making operations in Poland as it posted a 10.6% increase in turnover for the first 47 weeks of the fiscal year.
Shares of SPAR, which also has operations in Switzerland and portions of the UK, were up 9.8% at 111.59 rand at 1000 GMT.
The board decided that selling its holdings in Poland is in the business’s and shareholders’ best interests after carefully weighing all possibilities, the firm said in a statement.
To turn around the Polish deli and supermarket chain Piotr I Pawel group, SPAR purchased a majority position in the company in 2019. Since then, the company has worked to entice retail consumers with improved rebates, close loss-making stores, and open new stores in unconventional locations, such as gas forecourts.
However, it said that the retailer uptake was not improving rapidly enough to generate the necessary levels of profitability last year.
According to SPAR’s half-year results released in June, an increase in retailer loyalty and a decline in operational losses at the Polish firm were optimistic signs.
The 47 weeks leading up to August 25 saw SPAR Poland boost sales by 5% due to enhanced retailer loyalty. However, a decrease in the number of outlets in the comparative period somewhat offset this. SPAR Poland contributes 2.4 billion rand ($125 million), or around 1.8%, to group turnover.
The company that generates the most income for the group, SPAR Southern Africa, reported sales growth of 5.9%, with sales in its wholesale food sector growing by 8.1% and benefiting from a price increase of 10.1%.
