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Spar is set to relocate to a new warehouse being constructed along Harare-Chitungwiza Road

Business Reporter
Innscor Africa unit Spar Zimbabwe appears bullish about medium to long-term prospects of the local retail sector amid revelations it has entered into a long-term lease agreement for the use of a multi-million dollar warehouse being funded by the Zesa Employees and Pension Fund along the Harare-Chitungwiza highway.

Spar is currently using two warehouses in Graniteside and it intends to relocate to the giant facility upon its completion, sources have said.

The move to Seke Road also comes amidst the restructuring of the group, which will see the Distribution Centre (DC), Spar Corporate and Fresh-pro being combined in order to cut overheads and define structure.

Purchasing is also going to source directly now, which means DC can supply to independent retailers at competitive prices.
“Given the dramatic change to the macro-economic environment, Spar Zimbabwe feels that it is now the time for it to grow its business as it seeks to extend its tentacles in the retail sector,” said one source who preferred not to be identified.

“Some of its businesses are to be restructured to give a specific focus that will result in the development of sustainable business models for its long term plans.”

Efforts to get information from ZESA Employees Pension Fund were fruitless. At its analyst briefing in June, parent Innscor said it would amalgamate the Spar head office with that of the distribution centre in order to curb losses.

Last year the Innscor board resolved to spurge its vast cash holdings towards expansion of the Spar Zimbabwe unit. In a statement accompanying the group’s financial results this month, group chairman Mr David Morgan said they would continue to critically analyse its various business models and processes to improve their performance.

“Where necessary, organisational structures which allow for improved cost efficiency and the eradication of duplication of functions will be implemented.

“Management will continue to ensure that the appropriate returns are extracted from these investments in the coming year, as well as examine investments into additional synergistic businesses that create further value addition into the group,” he said.

With the company entering into a long-term lease with ZESA over the use of the premises under construction speaks volumes of the company’s intention to expand and reclaim its market share in the retail sector.

In Zimbabwe, Spar is made up of 10 corporate stores and 70 independent operators. Spar Zimbabwe falls under Innscor Franchising Limited, which is run by Innscor Africa Limited.