2019 INTEGRATED REPORT

Vision 2023 strategy

Based on engagement with stakeholders, operating environment research and key business drivers, the group identified the main challenges the strategy needs to address to meet the strategic objectives of growing revenues and maintaining a sustainable business. For each challenge, the group has mitigation activities.

Superior growth 

   

People 

   

Processes 

 
Main challenges 
   
Main challenges 
   
Main challenges 
  Spur Corporation is perceived to deliver below average growth. The group is highly reliant on Spur Steak Ranches and does not effectively leverage all its assets.      Although the group’s values, mission and vision are meaningful, employees struggle to actualise them. The group must effectively drive B-BBEE and transformation.      Some processes are overly time and resource intensive, making them inefficient. The group is perceived to lag when it comes to innovation and technology. 
Key activities
 
Key activities
 
Key activities

Vision 2023 maps a path, per operational division and brand, for sustainable growth.

The group held workshops to develop Vision 2023-aligned strategies with each brand and operational division. The group identified potential new ways to use some existing resources as revenue streams, which require further research and analysis. Examples include additional investments in company-owned restaurants and the expansion of the training academy.

The CEO roadshow communicated the strategy to corporate employees.

The group is entering the implementation phase, and has set targets per brand and operational division, with ongoing measurement and reporting guidelines.

Once implemented across the group, the group will review Vision 2023, assess progress, and make the necessary adjustments as required due to changes in the operating environment. 

 

The group’s employees are central to Vision 2023. Superior customer experiences in restaurants can only be achieved with a happy and engaged workforce. Spur Corporation’s goal is to be an employer of choice at group and brand level. Each brand and operational division’s strategy is underpinned by the commitment to “empower teams and individuals to deliver and grow”.

The group received qualitative and quantitative feedback from employees on Spur Corporation’s mission, vision and values. As a result, the group created a culture team. This team continues to engage with corporate and franchise employees to refine the mission, vision and values in a way that resonates with employees.

Once the workshops are complete, the group will test and communicate the amended versions with employees at group and franchise level. 

 

Vision 2023 will set a course for rapid growth. However, inefficient processes, if unattended, could unnecessarily increase costs. The group needs to address these inefficiencies to save time and money and allow for the improved deployment of resources.

As technology evolves, the workplace must follow suit. Workplace solutions have instant messaging, presence awareness, web and video conferencing, screen sharing, data sharing solutions, among others. The group identified a collaboration solution, which is being tested with select teams. Once the group is satisfied that the solution is appropriate, it will be rolled out to operational teams.

In terms of operational efficiencies, the group is developing an organic, ever-evolving ideology of what the “restaurant of the future” looks like, by brand.

The group’s customer base is increasingly digitally native, and brands need to remain relevant in the digitised and online world. Traditional marketing channels are under pressure as digital channels deliver hyper-local content to consumers with metrics that can show real conversion.

Spur Corporation is developing ways to use its rich customer data to engage with customers appropriately, create unique experiences and play an active role in understanding and meeting their needs. 


Our ultimate strategic objectives 
Growing revenues 
  This includes increased restaurant sales and new restaurants in existing markets, expansion into new geographic markets, strategic acquisitions, and vertical integration opportunities. 
KPIs    2017
actual 
2018*
actual 
2019
actual 
2019
target 
2020
target 
             
Total worldwide restaurant turnover (R’m)   7 157  7 197  7 637  7 547  8 040 
Operating profit margin1 (%)   27.9  21.4  30.5  31.5  34.0 
Return on equity2 (%)   16.6  18.3  18.6  18.9  20.2 
Total local restaurants    528  513  543  532  544 
Number of international restaurants    63  62  77  70  84 
Percentage of international revenue to total group revenue (excluding marketing funds)   4.9  4.5  4.9  4.6  4.2 
Percentage of international profits to total group profit before income tax (excluding marketing funds)   3.5  (3.1) (5.4) 1.2  1.4 

1 Includes share of profit/loss of equity-accounted investee (net of income tax) but excludes marketing funds.

2 Profit for the year adjusted for headline earnings adjustments and foreign exchange gain/loss, divided by equity (excluding marketing funds).

* Restated. 

Maintaining a sustainable business 
  This includes maintaining a responsive and agile franchise model to ensure franchisee return on investment. It is underpinned by ethical business practices, good corporate governance and social and environmental responsibility. 
KPIs    2017
actual 
2018
actual 
2019
actual 
2019
target 
2020
target 
             
Employee training costs (R’000)   2 248  1 794  1 901  2 933  1 642 
Community support (R’000)   2 930  2 602  2 100  3 041  2 400 
Electricity consumption (MWh)   1 178  1 063  983  1 100  1 100 
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