DURBAN - Restaurateur Spur lifted more than 10 percent on the JSE yesterday after the group said its restaurants showed recovery following the trading restrictions put in place by the government at the end of March in response to Covid-19 outbreak.
The group said its restaurants were currently trading beyond management’s expectations.
Spur said The Hussar Grill was the strongest performer during the month, achieving a 93.7percent of last year’s turnover, while the overall South African restaurant traded at 73.8percent of the prior year’s turnover, improving from 36.5percent recorded in July and 56.7percent for August.
“Spur Corporation’s restaurants have reported a steady month-by-month recovery in turnover since Covid-19 lockdown restrictions were relaxed to allow sit-down restaurant service at the end of June,” the group said. Spur Steak Ranches achieved a 72.1percent turnover, RocoMamas 86.5percent of last year’s turnover and Pizza and Pasta showed slower recovery at 63.2percent of turnover for the month.
Outgoing chief executive Pierre van Tonder said the recovery after the Covid-19 lockdown restrictions exceeded management’s expectations.
“The improving monthly growth trend is particularly encouraging in the tight consumer environment where spending is under intense pressure,” Van Tonder said.
“After several months of lockdown and limited social engagement, our customers are wanting a safe and entertaining family dining experience.”
Van Tonder said the resilience and appeal of Spur’s brands and value offering drove the stronger than expected turnaround in turnover. Spur restaurants grew to 600 out of 631 in its portfolio after all South African restaurants were closed at the beginning of the national lockdown on March 27.
However, restaurants were permitted to trade on a delivery-only basis from the beginning of May. The group said this was extended to allow collections at restaurants from June 1 and the sit-down service resumed from June 29.
At the height of the lockdown Spur showed its commitment to supporting franchisees, including discounting franchise and marketing fees and granting extended payment terms on certain debts.
The group waived fees from mid-March until end April, with Spur Steak Ranches franchise fee was discounted to 3percent of restaurant turnover, from 5percent and the marketing fee to 1percent from 4percent between May and August.
The group said fees were increased to 4percent and 2percent respectively for September as franchisees started to experience stronger turnover levels.
“Similar discounts were applied to the other brands, and the fee rates have similarly been increased for September. Gradual increases in the fee rates are anticipated as restaurant turnovers continue to recover,” the group said.
The group is expected to release its results for the year to end June next month.
Spur shares closed 7.38percent higher at R16 on the JSE yesterday.
BUSINESS REPORT