SPUR CORP. LIMITED INTEGRATED REPORT 2014

group profile

Material issues

Spur Corporation’s management evaluates the financial and non-financial material issues facing the group. These are derived from the group’s risk management processes, management deliberations, ongoing engagement with key stakeholders and group environmental sustainability guidelines.

Implementation of our sustainability strategy takes place at a strategic level (those areas the group can affect directly) and at an operational level (at franchisee level, where the group has indirect influence).

The issues deemed material to the group are detailed in the table below including the pages of this report in which these issues are discussed further.

    MATERIAL ISSUE CONSIDERATIONS
ECONOMIC
STRATEGIC
Local restaurant revenue growth Sustainable value creation depends on growing the number of outlets and gaining market share. A shortage of suitable sites and suitable franchisees could constrain growth.
Sustainable local franchise model We need to ensure that our franchisees earn a reasonable return on investment and run sustainable businesses. Rising costs and strong competition could place franchisee margins under pressure.
International expansion The group’s brands and formats are well placed to succeed in other markets but expansion plans must take unfamiliar market dynamics into account.
Sustainable supply of raw materials (procurement) The group consumes a significant amount of raw materials in its franchised operations. Climate change and social unrest could affect the supply of these raw materials.
Product responsibility (procurement) Food quality and food safety are critical considerations in the restaurant industry. We have a number of initiatives in place to ensure that our food is of a consistent high quality.
OPERATIONAL
Efficient use of resources to reduce costs (energy, water and waste) The rising costs of electricity and gas have made efficient use of resources an important part of managing franchisee margins.
Systems for monitoring and reporting Franchisees need to have the requisite equipment and procedures in place to monitor and report their resource management initiatives.
Support the local economy (procurement) Franchisees are encouraged to support local suppliers in certain categories of ingredients where quality standards are met.
ENVIRONMENTAL
STRATEGIC
Resource management (energy, water and waste) The group needs to ensure that as a responsible corporate citizen, it manages resources responsibly.
Transport Unnecessary travel must be reduced to minimise the carbon emissions attributable to group activities.
Packaging The group aims to limit the negative environmental impact of packaging by using sustainable materials and limiting ink use.
Supply chain (procurement) The group has a responsibility to ensure its suppliers share its values and consideration for environmental sustainability.
OPERATIONAL
Responsible resource management to reduce wastage (energy, water and waste) Franchisees should reduce wastage as part of their commitment to environmental and financial sustainability.
Green procurement Supporting responsible suppliers improves long-term sustainability of supply.
SOCIAL
STRATEGIC AND OPERATIONAL
Community support All restaurants and regional offices are encouraged to support their local communities through active involvement and increasing corporate social investment (“CSI”) spend. The Spur Foundation implements the group’s CSI initiatives.
Training and skills development Continued investment in developing employees at regional offices and in restaurants brings a range of benefits, including improved food quality, customer service and employee engagement.
Employment equity Transformation is imperative for South Africa’s long-term success. Facilitating the upliftment of historically disadvantaged individuals at franchises and regional offices is an important consideration for social sustainability.