| Thu 9 Dec 2004, 11:49 | | Spar on a drive to increase credit card use |
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Spar on a drive to increase credit card use
December 9, 2004
By Samantha Enslin
Durban - The Spar Group, a food wholesaler and distributor, is on a campaign to pick up more credit card customers while other food retailers have shied away from credit cards, preferring to stick to cash or debit cards.
The Spar Group, which listed on the JSE Securities Exchange in October, supplies 794 independently owned Spar, Build It and Tops liquor stores from the six distribution centres it owns.
Peter Hughes, Spar`s chief executive, said yesterday that the card, which was introduced four or five years ago, was a service to customers. Stores had previously offered credit but it was decided to move these customers to credit cards which were more efficient.
The credit card is administered by First National Bank.
`We have about 5 000 credit card customers but have never managed to grow it significantly. We are now on a campaign to do that,` Hughes said.
Some food retailers have opted out of credit cards, saying they might bring in an initial spurt of new business, but it would be a short-term gain that was not sustainable. Credit cards also bring the risks of fraud and bad debt.
One food retailer said customers had a wide range of financial instruments available to them and the credit card space was overtraded.
Brian Weyers, Shoprite Checker`s general manager of marketing, said: `Shoprite likes to reduce the amount of cash it handles, but credit cards add costs. We do not want to be in the credit business.`
Shoprite Checkers inherited the Hyperama card when it acquired the business in 1997, but Weyers said the card was not being promoted.
`We are handling the existing cards. Do we like it? No, we do not like it. But these are my shoppers and that is the service they expect,` said Weyers.
Sean Summers, Pick `n Pay`s chief executive, said Pick `n Pay had had a credit card in conjunction with Absa, which had been phased out. `In reality credit cards have limitations. `
Pick `n Pay had instead opted for a debit card.
Yesterday Spar shed 20c to R21.35, Pick `n Pay lost 25c to R23 and Shoprite dropped 20c to R12.80. The food and drug retailers sector fell 1.3 percent.
