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SPAR Austria’s investment plans for its international business

November 12, 2021 IN THE CATEGORY: Store openings

SPAR Austria intends to push its international business through increased expansion and investment. The company has detailed its strategy in an article in a renowned retail publication, noting that acquisitions are not excluded. As the market leader in the domestic food retailing business, SPAR Austria continues to drive its international business in Northern Italy, Croatia, Slovenia, and Hungary, currently realising a total turnover of €6.2 billion in these countries.

The company is focusing its investment on intensified expansion and modernisation of the food retail business, with several investment projects in warehousing and production planned.

“In the future, the most significant growth for the SPAR Austria Group will come from our foreign markets. SPAR Austria wants to grow organically in the ASPIAG countries through its stores, retailers, and franchises”, explains SPAR Austria’s Director for international business, Paul Klotz.

In the medium term, the SPAR Austria Group expects to meet the €8 billion turnover threshold in its foreign markets, Paul Klotz details in the article.

SPAR Austria CEO Fritz Poppmeier is seeking to transform the SPAR Austria Group with a gross total sales of nearly €17 billion into the best trading group in Central Europe, set the industry standard in terms of expansion, quality of the range, and pricing.

Fritz Poppmeier and Paul Klotz see much growth potential, especially in Italy and Croatia. In 2022, up to 12 new company-owned stores and up to 20 new independent retailer stores are set to open in Italy. In Slovenia, Croatia, and Hungary, five to eight new stores are to be opened per annum.

So far, SPAR has allocated half of its €720 million investment budget to these countries. “In five to ten years, between 60% and 70% of our investment volume will be outside of Austria”, emphasises Paul Klotz.

In 2020, SPAR Austria achieved market leadership in the domestic food retailing sector with an impressive growth of 16.5%.

Abroad, the food retail growth reached 6.5% (adjusted to exchange rates) due to more restrictive COVID-19 requirements in these countries.

“Life has normalised to a large extent, and tourists are returning, especially in Italy and Croatia. As a result, sales there are increasing in the higher single-digit percentage range”, says Paul Klotz.

With a turnover of €2.4 billion, Italy is the SPAR Austria Group’s largest foreign market. Since the retail trade is consolidating, SPAR Austria is considering acquisitions: “It is becoming more difficult to find land and build new stores. There may be opportunities to acquire retailers with good locations and sufficient staff, which would result in a growth spurt for us”, he adds.

In the fragmented Italian food retail sector, the retail group focuses on the North of the country. SPAR is the market leader in South Tyrol and Veneto and second in Emilia Romagna. The SPAR network in Italy currently comprises 240 company-owned stores and 380 stores owned by independent retailers.

The SPAR Austria Group is expanding its position in Italy, from South Tyrol, Friuli, Veneto, Piedmont via Emilia Romagna, and Lombardy. Expansion into more southern regions, including Tuscany or Umbria, is not planned. The Consortium DESPAR Italia, the professional representatives of wholesalers, has divided the market into regions. “We have the license for Northern Italy and have acquired additional regions in Lombardy”, says Paul Klotz.

Especially Lombardy, with its ten million inhabitants, and Emilia Romagna present opportunities to expand the business, he adds.

Source: Lebensmittelzeitung

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About SPAR Austria

The origins of SPAR in Austria date back to 1954, but the current SPAR AG was created in 1970 when the original founding families joined with other regional wholesalers to form SPAR Austria AG – a 100% privately owned Austrian company.

With licences granted by SPAR International, ASPIAG (Austria SPAR International AG) has developed SPAR in Slovenia, Hungary, Croatia, and Northern Italy. With sales of €8.3 billion and impressive growth of 16%, SPAR Austria became the market leader in the Austrian grocery trade during 2020, after being a market growth leader for over a decade.