Spur Corporation Limited is a South African restaurant company with a rich history and diverse portfolio. The company's head office is situated in Century City, Cape Town.
A Spur Restaurant
The Early Years
In 1967, founder and executive chairman Allen Ambor opened the Golden Spur on Dean Street in Newlands, Cape Town, South Africa. Soon after the 1967 opening, a second Spur, the Seven Spur, was opened in Sea Point, Cape Town. Because these first two restaurants were so successful, Allen Ambor decided to let other people open Spur restaurants using his brand and ideas. This is called a franchise model.
Expansion and Brand Portfolio
Although the founding and flagship brand is the Spur steakhouse restaurants, the company owns a number of other, predominantly South African, restaurant brands. Today, the Spur Group includes many different restaurant brands. The Spur Group consists of:
- Spur International
- Spur Steak Ranches
- Panarottis Pizza Pasta
- John Dory’s Fish Grill Sushi
- Captain Dorego's
- The Hussar Grill
- RocoMamas
- Spur Grill & Go
- Nikos Coalgrill Greek
- Casa Bella
The Group offers investors exposure to four of South Africa’s largest and most well-established sit-down restaurant chains - Spur Steak Ranches, Panarottis Pizza Pasta, RocoMamas and John Dory’s Fish, Grill & Sushi. The Hussar Grill, Casa Bella and Nikos Coalgrill Greek add an upmarket chain to our brand portfolio. Virtual Kitchen brands include Just Wingz (Spur Steak Ranches), Pizza Pug, Bento, Reel Sushi, Rib Shack RocoFellas and CharGrill Chicken.
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Global Presence
It currently has 569 outlets worldwide, with restaurants in various parts of Africa, Mauritius, the Middle East and Australasia. While it’s presence is predominantly in South Africa, Spur Corporation’s global footprint extends to 15 countries including Australasia, Mauritius, the Middle East, and a growing multitude of countries in Africa including Botswana, Ethiopia, Kenya, Lesotho, Malawi, Namibia, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
Spur Corporation's Global Presence
Restaurants are owned by franchisees or directly by the company. As of 31 December 2018, Spur Steak Ranches had 323 stores located in 15 countries.
Menu and Products
Spur Steak Ranches’ core product offering consists of steaks, ribs and burgers. In addition to these, the brand also sells chicken, schnitzels, seafood, wraps, sandwiches, salads, desserts, breakfasts and a dedicated children’s menu. The burgers have four options: beef, chicken, soya and rib. Spur Steak Ranches operates a sauce manufacturing facility that supplies franchisees with the brand’s sauces. The Group’s sauce factory manufactures the brands’ unique sauces, which are sold to franchisees. A range of over 25 retail sauces are produced by external parties under licence and are sold in leading supermarket chains nationally. These include the popular Durky Sauce, the Spur Salad Dressing fondly known to consumers as the ‘pink sauce’.
Franchise Model
The Company operates a franchise-based business model, with individual restaurants owned and managed by independent, entrepreneurial franchisees. The franchisees fund the development costs of new restaurants, as well as relocations and refurbishments.
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Recent Financials and News
Spur Corporation has delivered a strong full-year performance, despite challenging economic conditions. The owner of Panarottis and RocoMamas posted revenue growth of 32.5% as restaurants benefited from an end to curfew, and a 30% jump in headline earnings.
Key Ratios:
- P/E (Google Finance): 11.02
- Trailing P/E (Yahoo! Finance): 9.93 (no forward P/E)
- Dividend Yield (Google Finance): 6.90%
Spur Group CEO Val Nichas said: “Increased tourism in the Western Cape contributed to our sales growing by 31% in the province. We also experienced strong growth in restaurants in high-traffic national locations, such as OR Tambo International Airport, and major shopping malls, including Canal Walk, V&A Waterfront, and the Mall of Africa.”
During the past six months the group opened 18 restaurants locally - seven Spur, five RocoMamas, four The Hussar Grill and two Panarottis stores - while nine local restaurants closed due to the current difficult trading conditions.
The group’s international growth strategy gained momentum as four new restaurants opened, with two RocoMamas in Ghana and one in India, and a Panarottis outlet in Nigeria. Following the opening of the first restaurant in the Democratic Republic of Congo earlier this month, the group now has a presence in 14 countries. 17 new restaurants are planned to open in the second half of the financial year.
At 31 December 2022, 90% of restaurants had generators or were linked to shopping mall central generators. This has increased to 95% at the date of this report, ensuring that the majority of the group’s restaurants continue to trade during load shedding, providing our customers with a consistent dining experience.
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Controversies
In March 2017, a racially charged incident occurred between two customers in a South African Spur Steak Ranch restaurant when a black African family got into an expletive-filled argument with a white Afrikaner family, after the black child reportedly hit the white child. The restaurant banned the white family, but not the black family. White Afrikaners criticised and ultimately boycotted the restaurant, which was staffed by black Africans, for siding with the black family, as well as for not doing more to break up the fight.
The "Native American" Theme
The logo of the restaurant is a Native American man wearing a war bonnet. The decor of the restaurant uses tipis, totem poles, and tomahawks. Each restaurant under the Spur brand is given a real or imagined tribal name such as the Golden Spear Spur, Running Brave Spur or Cherokee Spur. Spur was named as "coolest place to eat out" in a recent youth survey by the South African Sunday Times. Generations of children have grown up having birthday parties at the restaurants, where they wear paper headdresses similar to the Burger King crown.
Pierre Van Tonder, the chief executive of the Spur Corporation, has claimed that the theme is a show of respect for Native Americans, referring to Native Americans as "a tribe that embodies all that is noble and lives in harmony with the land and the universe." While the restaurant is popular among South Africans, the use of Native American stereotypes is considered racist by many Native Americans.
Johnnie Jae, a member of the Otoe-Missouria and Choctaw tribes of Oklahoma, has a very different reaction to Spur's branding and decor. "The logo is a dehumanizing caricature of Native men," she said. "It represents the colonial mindset that our imagery, identities, culture, and spirituality as Native people can be redefined, exploited, misappropriated and commercialized as they see fit."
Spur's management believes the chain is paying tribute to Native Americans and sees theirs as a respectful portrayal. But they seem unaware that the "noble savage" caricature is equally antiquated and offensive.
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