Spur enjoys shift to takeaways

Restaurant group Spur, the owner of RocoMamas, the Hussar Grill and John Dory’s, has managed to eke out some sales growth in its year to end-June, saying customer loyalty and a shift to takeaways provided a jolt as the industry battles pandemic restrictions.

Restaurant group Spur, the owner of RocoMamas, the Hussar Grill and John Dory’s, has managed to eke out some sales growth in its year to end-June, saying customer loyalty and a shift to takeaways provided a jolt as the industry battles ongoing pandemic restrictions.

Franchised restaurant sales grew 1%, or by R60m, in the year to end-June, Spur said on Friday, rising more than two-thirds in the second half, off a lowered base, given the industry was battered by a total prohibition on sit-down trade in March 2020.

Profits were under pressure as the group moved to support franchisees with concessions, but Spur, like rivals such as Famous Brands, shifted to online takeaways and focused increasingly on drive-through businesses as consumers increasingly ate at home.

New restaurant turnover trends emerged that were closely aligned to the changing regulations of seating capacity, takeaway and deliveries only, as well as curfew hours, Spur said in a statement.

“However, despite the continuation of these difficult trading conditions, the group’s casual dining restaurants were more poised to handle deliveries and takeaways, loyal customers were more responsive to convenience channels such as click and collect, and, overall, the second half of the 2021 trading year produced improved results that indicate a slow, but positive recovery,” the group said.

The restaurant group, now under the leadership of former Famous Brands executive Val Nichas, who took over from Pierre van Tonder in October 2020, had launched “virtual kitchen” brands.

These offer takeaway meals under new brands but made from existing restaurants that require little additional investment from franchisees.

Burger chain RocoMama’s was the standout performer, growing sales 13.1% year on year, while Nikos, which provides Greek food aimed at more affluent customers, fared worst with sales declining 12.8%.

At the end of December, the group had 633 restaurants, 87 of those located outside SA, with SA sales growing 1.5%, and international sales falling 3%.

Though restaurant sales in the second half of the financial year improved on the first half’s, concessions to standard franchise and marketing fee rates charged to franchisees during the year to support their financial sustainability affected group revenue and profit, Spur said.

Comparable headline earnings per share, which excludes effects such as deficits and surpluses in Spur’s marketing fund and other one-off items, is expected to fall by between 15% and 20%, or a decline of as much as R20m.

In afternoon trade on Friday, Spur’s shares were unchanged at R18, having fallen by about a third since the beginning of 2020.

THE SECOND HALF OF THE 2021 TRADING YEAR PRODUCED IMPROVED RESULTS THAT INDICATE A SLOW, BUT POSITIVE RECOVERY