Spar reports muted revenue growth

South Africa's third-largest grocery chain, Spar Group, is facing challenges in revenue growth due to the impact of Covid-19 related lockdowns and civil unrest in its primary South African market. In a recent interview with CNBC Africa, CEO Brett Botten discussed the company's performance, competition in the retail sector, and the potential impact of future lockdowns on their business. Spar Group reported mixed results, with revenue growing by 3% in Ireland and Switzerland, but decreasing by 1.4% in South Africa when liquor sales were excluded. The company faced disruptions from lockdowns and unrest, with 53 stores remaining closed due to damages. Botten acknowledged the difficulty in raising prices amidst cost pressures and competition from other retailers like Shoprite. He highlighted the importance of promoting private label products to offer value to consumers and drive growth in the upcoming year. Spar Group is also focusing on expanding its store network and revamping existing stores to boost revenue. However, the potential reinstatement of liquor sales restrictions due to the fourth wave of Covid-19 is a major concern for the company. Botten emphasized that any further limitations on liquor sales would be devastating for Spar Group's business. In terms of future expectations, Spar Group is cautiously optimistic about its European markets but concerned about the impact of potential lockdowns in South Africa. The company's Swiss and Irish businesses benefitted from previous lockdowns, but South Africa remains a challenge. As the festive season approaches, Spar Group is preparing for trading conditions in different geographies and hoping to navigate through the season with minimal disruptions. When it comes to employee vaccination, Spar Group has not implemented a mandatory vaccination policy but has encouraged employees to get vaccinated by providing on-site vaccination stations in collaboration with the Department of Health. The company is taking a sensitive approach to vaccination and prioritizing the health and safety of its employees.