With a £25bn turnover, Spar is the world's largest independent retail food chain. Having already tapped lucrative Bric markets, the group has gained a foothold in the Middle East and is eyeing sub-Saharan Africa. Just how far can it go?
Spar, the symbol group food retailer with an 80-year history, has experimented with many different marketing slogans. Yet while the singalong "So near, so Spar" from the 1980s will always have a place in UK advertising history, the cosy image of an unassuming neighbourhood store belies a backstage campaign of aggressive international expansion.
Be it India ("Live life better"), Ireland ("Under the tree at Spar"), South Africa ("Good for you") or Australia ("Making every day better"), Spar International's global footprint of 35 countries already bestrides Asia, Africa, Australia and all key centres in eastern, western and central Europe.
And if that was not quite enough for the world's largest independent retail food chain – boasting sales of €30bn (£25bn) last year – to swallow, Christmas came early in 2011. A launch in Abu Dhabi last November signalled up to 10 more store openings in the Middle East by next year.
The man behind Spar International's determined expansion campaign in cities as diverse as Beijing and Bangalore is the Irish-born managing director, Gordon Campbell, a self-confessed Spar "lifer" of 28 years standing.
Speaking of his most recent foreign adventure, he says: "It may look as though we want to take over the planet, but our approach to overseas expansion is extremely focused. We have identified the Middle East as offering us a major opportunity for growth alongside selected partners and I have no doubt that the region will become one of the key Spar regions to watch in the coming 12 months." Nomadic pioneer
Campbell is based, on paper at least, at the company's Amsterdam HQ, but lives the intensely nomadic life of an international pioneer. "I was in China in January, and it's Russia this month and India in March," he says, proudly. And his far-flung forays alongside global giants such as Wal-Mart and Carrefour have brought notable success.
One of only a handful of international food retailers to gain an early foothold in Russia in 2000, followed by China three years later, Spar was the first in the pack to conquer India – where it now operates 10 hypermarkets – in 2004.
In new and emerging markets overall, where it concentrates on its hypermarket and larger supermarket formats, it is now the fastest-growing name in food.
While India's complex $450bn (£294bn) retail sector has proved a tougher nut to crack than, say, China or Russia, Spar's USP holds as true for New Delhi, says Campbell, as it does for New Romney.
"Ordinary people all over the world, irrespective of location or income, are looking for an international, quality shopping experience that gives them a great, fresh and food-to-go offer, appealing merchandising, value for money and excellent service. Our rapid growth in emerging markets demonstrates that our business model of global expertise twinned with local understanding is uniquely placed to fulfil that need whether our members operate in Norway or Namibia."
Russia provides a good case in point. "When we entered the country, we found the food stores to be uniform, drab and obsessed with little but low prices," says Campbell. "Our stores have injected colour, vibrancy and excitement and along the way, we have become a top 10 player with 275 stores and Russian sales close to €900m."
There can be little doubt that with China set to overtake the US to become the world's largest grocery market this year and to top €1trn by 2015 – according to international analysts IGD – the leading dragon economy remains the ultimate prize for all serious retail explorers. The opening of Spar's first Chinese hypermarket, in Beijing in 2010, remains a personal triumph for a managing director who was involved in the fine detail from the earliest stages. Today, the firm has 160 stores, 6.5m sq ft of selling space and a record €500m in Chinese sales last year to boost its position. But conquering this vast country – through strategic partnerships and finely honed regional information – will take time and patience, Campbell agrees.
"Although our market share in China is no more than between one per cent and two per cent at present, our long-term ambition for the country is to become a top 10 retailer," he explains. Watching Tesco
While Campbell dislikes the term "Tescoisation" – used as a shorthand for the near-saturation point reached by supermarket operators in the crammed UK retail food market – he agrees that Tesco is the one brand that Spar needs to track as its international empire grows stronger. "None of our rivals makes me lose sleep, but the one that I have most dealings with on a day-to-day basis is Tesco, with whom we go head to head in critical markets such as China," he says. "But I don't want to view it in terms of who tends to win or lose because I believe there is room for all of us in a market of 1.3 billion consumers."
India's supermarket sector may be a different matter, though. "It's true, however, that elsewhere in the developing world, Spar has made more headway than some of its rivals," he adds, obliquely referring to Tesco's decision in December to delay Indian expansion in the light of a volte-face on retail reforms by the Indian government and a hurried pulling-up of the drawbridge.
While Spar's rivals would agree that it is China, India, Russia and the Middle East that are among the most potentially rewarding markets for the coming few years, Campbell excludes the US on the grounds that America is even more experienced than Spar when it comes to the independent symbol approach to retailing and won't need the firm's expertise any time soon.
The inclusion of sub-Saharan, black Africa on Campbell's wishlist is more of a surprise. In 2010, Spar International opened its first store in Malawi and now plans up to 10 more supermarkets and Express convenience stores within the next five years. While the firm's overall presence in Zimbabwe, Namibia, Botswana, Zambia and Nigeria runs to less than 150 stores in total – compared with 803 in South Africa alone – Campbell is optimistic about long-term trading conditions on the continent.
"We hear an awful lot about the rise of the middle-class consumer in China and India and far less about changing patterns of consumption in Africa," he says. "But as a firm which has a growing presence in this fascinating continent, it could be that many western firms are missing a trick." Food revolution
From its beginnings in the Netherlands in the early 1930s, when the firm revolutionised food retailing with the launch of a private label, Spar spread to Belgium in 1947 and expanded rapidly into the rest of Europe in the 1950s. Today, the familiar red and white logo – unchanged since 1968 – is the emblem of 12,680 stores worldwide serving more than 11 million customers a day.
Established in 1957, Spar UK is now Britain's leading convenience store group, with a turnover of more than £2.7bn and some 2,560 stores. While it is the Spar hypermarket format that is gaining ground in the developing world, Spar UK is most associated with smaller neighbourhood and convenience stores.
Spar's image in the UK is hardly glamorous – its "There for you" marketing slogan is as anonymous as its TV presence – but Campbell is unrepentant. He points to the group's 16-year stint as principal partner of European Athletics and its official sponsorship of United Kingdom Athletics. "Spar International's European Athletics sponsorship has given us enormous awareness across Europe and while it's true that Spar UK at least doesn't tend to go in for big-name advertising, you may be surprised to learn that Spar Austria, which has close to 30 per cent of the market, recently used Pierce Brosnan to front a major marketing campaign," he says.
"As always though, our decisions on advertising and promotion are made on a national basis and the budgets allocated will always reflect the market share of the members who work so hard to reflect their communities – wherever in the world they happen to be."
And that, in a nutshell, is for Campbell the beauty of his job. "Being at the leading edge of global food retailing and seeing Spar's unique business model work so well, and in so many diverse areas of the world, is astonishing. The world of Spar is a breathtaking place to be." SPAR'S BIG WORLD
Food retail Employees:
50,000 in the UK, 250,000 plus worldwide Annual turnover:
€30bn (£25bn) in 2011 In their own words:
"We want to be the local food store of choice, meeting the real needs of individual consumers in every country in which we operate"