Market gives thumbs-up to Spur despite growth slowing

Spur, whose brands include Panarottis and John Dory's, said total restaurant sales rose to R6.2bn in the year to June, with sales from existing restaurants increasing 7.8%.

The group's performance was boosted by the inclusion of recently acquired chains, The Hussar Grill and RocoMamas, as well as aggressive promotion.

Restaurant sales in SA grew 11.3%, while sales from international restaurants increased 18.6% in rand terms. Applying a constant exchange rate, international restaurant sales rose 12.1%, the company said.

Spur opened 44 outlets in the country and eight internationally, including the first Spur RBW (Ribs Burgers Wings) company-owned store in Corby, UK, last month.

Spur grew its number of outlets to 522 from 490. Of these, 58 are outside SA, six more than the 52 outlets in the previous year.

Panarottis Pizza Pasta was the top performer with a 25% rise in sales and 15.8% gain in existing restaurants. The core Spur Steak Ranches reported a 9% advancement and 7.3% in existing restaurants.

Captain DoRegos continued to suffer as sales fell 13.2% and 20.2% in outlets . The chain targets lower-end consumers who are more affected by utility bills, other state administered prices and debt than other buyers.

The EY BER retail survey for the second quarter shows retailer confidence decreased, with 48% of respondents dissatisfied with prevailing conditions compared to 40% in the first quarter. Retailers expect a slower pace of growth in sales volumes and are less confident about the future, expecting that business conditions will deteriorate in the third quarter.

Spur's results will be released on 10 September.

The company's buyout of RocoMamas was seen as a coup as competition has intensified in the burger category owing to the launch of US brand Burger King, with McDonald's, Wimpy and Steers also lifting their game.

RocoMamas, which targets a consumer with a higher-middle income, is differentiated from mainstream offers by an individualised, artisanal-style dining experience. Spur aims to grow the chain to 30-40 outlets.