ANNIVERSARY SPAR celebrates three decades in Hungary

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EMBRACING DOMESTIC PRODUCTS AND THE ENVIRONMENT

SPAR HUNGARY CELEBRATES 30-YEAR ANNIVERSARY SPAR Hungary has been an important player in the Hungarian economy and retail trade for three decades. As one of the largest employers in Hungary, it provides jobs for nearly 13,000 people and supports family businesses, producers and farmers operating in Hungary. The company, which is celebrating its anniversary, adapts to consumer needs by keeping pace with modernization in the spirit of environmental and social sustainability.

"Over the past thirty years, our company has contributed more than HUF 400 billion to the country's development, and more than one billion in total to various social, environmental, sports, educational and cultural causes. We started with just 50 employees and now, we are proud to offer a secure livelihood to nearly 13,000 people, for whose achievements we are particularly grateful. And nothing shows our Hungarian connection better than the fact that more than 90% of the food products in SPAR are sourced from companies operating in Hungary, because helping domestic agriculture and food processors – family businesses and Hungarian farmers – to market their products has long been a priority for our supermarket chain," Márk Maczelka, Head of Communications at SPAR Hungary points out. All across the country

SPAR Hungary started its operations in 1990 and its first supermarket store was opened in Tata, west of Budapest, in 1991. Over the past three decades, the store network has expanded to 588 outlets, thanks to HUF 647 billion of investment over the years. The supermarket chain has grown year on year in Hungary and has become a major player in the Hungarian retail sector. Last year, SPAR had a total of 381 company-operated stores: 324 SPAR supermarkets, 23 City SPAR supermarkets and 34 INTERSPAR hypermarkets. Another important step in this development was the opening of popular franchise units in four additional formats nationwide: SPAR partner, SPAR market, OMV-SPAR express and LUKOIL-DESPAR. The number of franchise

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stores reached 207 in 2021, compared to two in the start-up year, and they are located in 94 municipalities all across the country.

Embracing domestic products

The company's business policies and practices in support of the Hungarian economy have long been a priority. The proportion of SPAR's domestic suppliers has ranged between 85% and 90% over the last ten years, with 89% of the value of purchases in 2020 coming from domestic partners. In a time of pandemic, the company says it is particularly important to protect and stimulate the domestic economy, and SPAR has demonstrated its commitment to this by joining the Hungarian Product Nonprofit Ltd.’s campaign to buy domestic products and by launching the ‘Hungaricool by SPAR’ product innovation competition, which is unique in the Hungarian retail sector and embraces domestic product development.

Convenience products from meat plants

In parallel with the continuous and significant expansion of its network, the high-volume sale of fresh meat and meat products laid the foundations for the establishment of the Regnum meat plant in 2004. In response to the growing demand, the company decided to expand its production capacity and acquired the ZIMBO Perbál Meat Processing Ltd. plant (in Perbál, northwest of Budapest), which now operates under the name Regnum Meat Plant Perbál. In 2020, the meat plants employed 368 people. As consumer demands have changed, the need for both fast and quality meals has increased, and the expansion of convenience products was a priority in the company's product development in 2018. To support this, the company has established the ‘SPAR enjoy. convenience’ plant in Üllő, southwest of Budapest. After two years, production output has doubled, and the new unit has generated a total of HUF 3.2 billion in revenue over the past three years. Own brand: quality and reliability

For decades, SPAR has been committed to developing its own-brand range: in addition to increasing volumes, the use of quality and the highest possible proportion of domestic ingredients is a key priority. The range is expanding year on year, with more than 3,600 own-brand products from 31 product lines now available on store shelves. In addition to developing quality products that are also easy on the wallet, the company attaches great importance to the distribution of domestic products. When developing new private label products or repackaging existing products, the possibility of using the trademark is always discussed with the partner. This is one of the reasons for the dynamic growth in the number of own-brand trademarked products.

Charity in many walks of life

As a testimony to its active participation and responsibility in the social life of the country, SPAR donated more than HUF 186 million to a variety of causes last year. The year 2020 was also special in terms of social involvement: the ‘Joy to Give!’ Christmas charity campaign, with which SPAR has been helping people in difficult circumstances for more than 20 years, took a different form. In December, the fundraising campaign, coordinated by the Hungarian Charity Service of the Order of Malta, enabled customers to support people in need by buying donation cards. At the end of the campaign, SPAR made an unusual contribution to increase the amount collected: it doubled the value of the donations made by customers, thus, the 2020 ‘Joy to Give!’ campaign ended with a total donation of HUF 36 million. Despite the epidemic situation, the 35th SPAR Budapest Marathon® Festival, where the company was again the main sponsor, attracted many sports-loving people. The sporty day was not without charity either: as in previous years, the retail chain donated the entire proceeds from the Regnum meat plant stand to the Hungarian Charity Service of the Order of Malta. The company also supports a number of smaller partners every year, as well as giving NGOs the opportunity to apply for funding, thus helping local causes. SPAR Hungary is also committed to equal opportunities. For five years, the company has been working with the farm ‘Janka Tanya’ in Tótvázsony, near Lake Balaton where young people with autism are welcomed by the nearby Veszprém INTERSPAR in 2-3 times a week to stock and store goods. A film about the joint work was shown on several Hungarian television channels. Although it cannot be considered a classic charity action, the initiative, which was implemented in professional cooperation with the Agricultural Marketing Center, is unique in Hungarian trade and its main objective is to support Hungarian product innovations. In the Hungaricool by SPAR competition, the organizers were looking for creative food products with sustainability in mind. The innovative and inventive products with original flavor combinations are now available in INTERSPAR stores and the SPAR online shop. This year, the company carries on supporting competition by joining the popular business show ‘Among Sharks’ (shown on the country’s most popular commercial television channel RTL Klub and known internationally as Dragons' Den or Shark Tank), where internationally renowned investors will evaluate the developments.

SPAR FOR THE ENVIRONMENT – SUSTAINABLE DEVELOPMENTS AND INNOVATIONS

Meeting the needs of responsiblyminded customers and educating society through the introduction of ‘green’ solutions in the shopping experience is essential for SPAR Hungary. As part of its sustainability efforts, the company is continuously reducing plastic waste. Over the years, its strategy has been to take a number of steps to reduce the amount of disposable plastic waste generated. The SPAR Group has now reduced this even further by eliminating the use of caps and lids for some own-brand milks and creams, plastic packaging for certain vegetables and fruits, and replacing the use of own-brand SPAR cooking oil bottles. As well as making the materials, technologies and processes used in its operations more sustainable, SPAR is also encouraging its customers to be more environmentally conscious. With more and more talk of sustainable living and sustainable transport, the company is also encouraging consumers to consider how big their household's ecological footprint can really be. That's why it has partnered with Nestlé to produce the ‘How to be an environmentally-conscious shopper 2020’, a booklet with useful tips and guides to help consumers make environmentally conscious choices. As demand for food rebounded during the epidemic, the number of online purchases increased by 15% in the first quarter of 2020, but due to increased consumption, unfortunately, more household waste and wasted food may end up in the trash. While there is more and more talk about a sustainable lifestyle, sustainable transport, many still do not rethink the ecological footprint of their own household. Therefore, Nestlé and SPAR formed a partnership to create the booklet in which they help customers make environmentally conscious decisions with helpful tips and guides. SPAR takes an active and pioneering role in matters affecting the future of the Earth, and one of the cornerstones of its business philosophy is environmentally conscious corporate governance. The retail store chain is using more and more environmentally friendly solutions, from waste management through logistics to advertising, and is also involving its customers in their operation. As a result, the amount of plastic packaging has decreased and more and more recyclable paper has been used. Waste glass collection islands became available in several places and the weight of the flyers was also reduced. Under the SPAR program for a sustainable future, SPAR, as a responsible company, focuses primarily on areas where it has already achieved significant results with customers and partners. These include the environment, health, food safety, worker safety and helping disadvantaged members of society. SPAR also regularly initiates and participates in campaigns to raise awareness against food waste.