Spar says its on-demand shopping app for groceries and liquor, Spar2U, is about to reach critical mass.

“Rapid progress has been made with the onboarding of 87 sites as at 30 September 2022,” the company announced in its annual results.

“Interest levels from Spar retailers to utilise the new platform remain high and this is expected to enhance Spar’s ability to assist retailers in driving improved consumer service and engagement going forward,” the company said.

“This ‘as-a-service solution’ is uniquely tailor-made for the Spar interdependent retail model and takes all of the onerous effort out of our retailers’ hands, allowing them to focus on trading.”

Spar said feedback from consumers using this new channel has been extremely positive.

In September the platform performed well, with the delivery arriving slightly ahead of schedule.

Spar is taking on Pick n Pay, Woolworths, and Checkers in the highly competitive same-day delivery market for fast-moving consumer goods.

Checkers’ Sixty60 one-hour on-demand grocery delivery service, launched in late 2019, set the standard for the country.

Pick n Pay joined the ecommerce race in 2020 with Asap! (originally Bottles), and announced a partnership with Takealot to list its groceries within the Mr D food delivery app.

Woolworths launched its same-day service, Woolies Dash, in December 2020.

On Wednesday, Woolworths reported 26% growth for Woolies Dash in South Africa during its 20-week trading update.

For its overall results, Spar reported a 6% increase in group turnover to R135.6 billion and a 1.1% increase in operating profit to R3.4 billion during the year.

However, headline earnings per share was down 3%, while dividends per share decreased 51%.

Spar said it was temporarily adjusting its dividend policy, reducing the dividend for two years, to fund, among other things, its strategic investment in SAP.

“Group profitability continued to be impacted by the consequences of the pandemic in the first half of this financial year and new geopolitical circumstances which has seen all regions experiencing fuel and energy cost pressures,” Spar stated.

“In South Africa these pressures were further exacerbated by the impact of ongoing electricity load-shedding.”