Continued COVID-19 pandemic lockdown trading restrictions, albeit at reducing levels in the first half of this reporting period, further exacerbated by the onset of the second wave of the pandemic and the resultant implementation of revised Level 3 restrictions in the key trading month of December 2020, curtailed franchised restaurant sales in the six months to December 2020 (“the period”).
As expected, these restrictions, combined with decreased consumer disposable income, were the main contributors to total franchised restaurant sales declining by 29.5% to R2.9 billion (H1 F2020: R4.1 billion) in the period.
Sales for the period from franchised restaurants in South Africa declined by 31.0% with sales from international restaurants decreasing by 17.3% in Rand terms. Using a constant exchange rate, international restaurant sales were 17.1% lower.
Pleasingly, a steady post-lockdown recovery in restaurant sales month-on-month was reported across most of the group’s brands in the first four months of the financial year to October 2020.
|Franchised restaurant sales|
% change H1 F2021 versus H1 F2020
|Total restaurant sales
|Existing restaurant sales*
|Spur Steak Ranches||(31.0)||(31.1)|
|Pizza and Pasta (Panarottis & Casa Bella)||
|John Dory’s Fish Grill Sushi||(40.1)||(42.0)|
|The Hussar Grill||(37.6)||(37.6)|
|Nikos Coalgrill Greek||(34.5)||(34.5)|
|Total South African operations||(31.0)||(31.5)|
|Total international operations||(17.3)||(29.0)|
* “Existing restaurant sales % change” is calculated as the percentage change in sales from only restaurants that traded for any part of the comparable six-month period ended 31 December 2019.
In South Africa, 17 restaurants were opened and 18 closed during H1 F2021, while 7 restaurants were opened and 4 closed internationally in the same period.
At 31 December 2020, the group’s restaurant base comprised 633 outlets (30 June 2020: 631), including 87 outlets (30 June 2020: 84) operating outside of South Africa.
Val Nichas, who was appointed CEO of the group on 1 January 2021, commented:
“A steady post-lockdown recovery in restaurant turnover month-on-month was reported across most of our brands with a strong October 2020 trading month”.
“The reality of a second wave of COVID-19 infections gathering momentum in South Africa in December 2020 however, necessitated government’s reintroduction of a national curfew and restrictions on social activity. The imposition of the adjusted level 3 lockdown regulations in late December impacted restaurant sales, with the national curfew limiting trading hours. The ban on the sale of alcohol together with the stringent reduction on seating capacity further reduced restaurant foot traffic. In addition, the closure of beaches immediately impacted trade in restaurants located in coastal regions in what is traditionally a high trading month”.
“Restaurant turnover for the month of December 2020 in South Africa declined by 25.8% compared to December 2019, while international turnover decreased by 11.1% in Rand terms (8.3% on a constant exchange rate basis) for the same period.”
The financial information in this sales update is the responsibility of the directors of Spur Corporation and has not been reviewed or reported on by the group’s independent external auditor.
Spur Corporation’s interim results for the six months ended 31 December 2020 are expected to be released on SENS on 2 March 2021.