South African grocery chain SPAR Group has recorded an increase in full-year profits, despite a year of “slow economic recovery” and an “extremely competitive retail environment”.

For the 12 months to the end of September, the retailer earned ZAR915.8m (US$130.5m) compared to ZAR745.2m in the year-ago period.

Spar said sales rose 9% to ZAR34.8bn, while operating profits climbed 14.2% to ZAR1.30bn.

Chairman Mike Hankinson said the group expects 2011 to be “another challenging year”, but remains positive about the opportunities for its business.

“We anticipate that consumer spending will remain under some pressure, however the impact of lower interest rates, improving economic activity and a gradual increase in food inflation are positive signs for an improvement in trading,” he added.

The group said it will focus on “aggressively driving new business opportunities, organic growth, stringent cost control and securing operating efficiencies” going forward.

According to figures on the Spar International website, the retailer had 803 stores in South Africa at the end of 2009.