Consumers still managing to eat out

Fin24 and Sens
2013-07-26 13:01
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Cape Town - Financial woes are putting the breaks on consumers' ability to eat out, yet the share price of Spur Corporation [JSE:SUR] rose nearly 3% after the restaurant chain's group said their full-year sales rose 16.4%.

Spur's share price was up 2.92% to R30 shortly after the results, but has since slipped back to trade at R29.65 (+1.79%).

Spur Corporation continued its resilient performance in the current weak consumer spending environment and increased restaurant sales across its brand portfolio in the 12 months to June 30 2013.

Restaurant turnover exceeded R4.8bn for the period and sales from existing outlets were 13.1% higher. Restaurant sales in South Africa increased by 15.4% for the period, while sales in the international operations were 24.7% higher in rand terms.

The performance of the international business has benefited from the depreciation of the rand in the second half of the reporting period. Total sales in local currency increased by 14.0% and by 7.7% in existing outlets. Spur Steak Ranches in South Africa increased sales by 15.2%, with turnover from existing restaurants up 13.0%.

The drivers of growth continue to be the Spur Family Card loyalty programme, breakfast and weekday promotions and the brand's good value family offering.

Panarottis Pizza Pasta performed strongly and grew restaurant sales by 31.4% in South Africa. The brand has benefited from the introduction of a new menu, upgraded kids play facilities, ongoing weekday promotions and new store openings. Turnover from existing outlets increased by 22.4%.

Sales in John Dory's Fish Grill Sushi restaurants grew by 11.4% and by 9.3% in existing stores as customers responded favourably to the enhanced menu offering and family dining experience in stores.

Captain DoRegos, the value-oriented franchise takeaway chain, continues to be integrated into the group's operations. The brand was acquired by the group with effect from March 1 2012 and therefore does not report a comparative sales performance.

Spur Corporation expanded its restaurant base to 479 following the opening of a net 23 outlets during the period. At year end the group operated 429 restaurants in South Africa and 50 across the international operations.

"While consumers in our target market are under financial pressure, the strength of our brands and the support of our loyal customers has enabled us to maintain sales momentum," said chief executive, Pierre van Tonder.

"Our aggressive promotions strategy across all the brands continues to drive foot traffic and ensure that we remain competitive in the family sit-down restaurant market."

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