2019 INTEGRATED REPORT

Spur Steak Ranches

“We rigorously implemented the strategic priorities, resulting in a 2% to 3% increase in franchisee operating profit margins.” 


Performance

Spur Steak Ranches’ restaurant turnover for the year increased by 5.4% and by 4.2% in existing restaurants, resulting in increased franchise revenue of R230.5 million. Revenue benefited from lower franchise fee concessions (temporary discounts on fees) as franchisee margins improved. Operating profit increased by 9.1% to R192.4 million.

The operating profit margin declined slightly to 83.4% (2018: 83.9%) due to the introduction of new employees to head up the roll out of the Spur Grill & Go brand. In other areas, overhead costs were effectively controlled.

The brand strategically relocated restaurants trading in redundant markets and invested in restaurant design and refurbishment, including kitchen redesigns for labour and service efficiency and the development of new smaller Spur concept restaurants. The brand invested in play areas, implementing innovations to remain competitive.

Continuing menu engineering ensures that restaurants cater to customers’ tastes and remain competitive. Spur Steak Ranches enhanced its freshness and “homemade” credentials by focusing on authenticity and product quality. It kept its breakfast menu innovative with new offerings and also introduced new crockery, which enhanced the presentation
of its products.

Spur Steak Ranches appointed a new creative agency and launched a national television campaign, backed by targeted social media marketing campaigns, to showcase its core values as a family restaurant and highlight its contribution to communities.

The Spur Family Card has 1.2 million active adult members (2018: 1.46 million). During migration to a new platform, only known members were migrated, resulting in 400 000 “unknown” profiles falling away. This saw a decline in loyalty turnover to R723 million (2018: R1.7 billion). The eGift voucher platform delivered voucher sales of R7.1 million.

Spur Steak Ranches’ business-to-business gifting portal, which facilitates companies acquiring and allocating electronic gift vouchers to, for example, reward their employees or loyalty members, has more than 40 corporate members.

 

 


Strategic outlook

Spur Steak Ranches’ strategic intent is to be the best family sit-down restaurant, to ensure the continuous growth of brand equity and enhance profits and return on investment for all stakeholders.

Customer experience is key to the strategy going forward. Spur Steak Ranches will use its rich reserve of data to tailor unique and exciting customer experiences. The brand will also continue to seek out efficiencies to reduce costs, including reducing the size of restaurants and redesigning kitchens with optimal technologies. 

 
 
     

 

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