Anyone venturing onto the Spar investor relations website and clicking the “download investment case” link will be presented with a short PDF. It’s a page from the 2024 integrated annual report — page 13, as it happens. And if this isn’t ironic enough, the subheading on the page proclaims “More reasons to believe” in beautiful, flowing italics.
It’s going to take a lot more than a pretty font to get investors to believe at this point. Spar is a shambles; the CEO is on his way out and the latest trading update is a disaster. The share price has shed a quarter of its value year to date — and that’s before the market digests the Iran developments and what this means for risk appetite in emerging markets.
Imagine a Venn diagram, in one circle of which are companies that have made offshore acquisitions that have turned out to be disasters. And in the other circle, we have local retailers that have made strategic mistakes and allowed competitors to run away with their market share.
Many retailers fall into one of those two categories. But in the “overlap of death”, having got literally everything wrong, sits Spar. And that’s where a company really, really doesn’t want to be.
A good number of market punters reckoned that once Spar had successfully found a “buyer” that would effectively be paid to drag the carcass of Spar Poland away, the share price would stabilise and management would focus on improving things in South Africa — particularly as people were returning to the office en masse and would be more interested in Spar’s convenience-focused footprint vs getting deliveries on scooters. There was a belief that the business in Switzerland would at least stay in one piece, and there was some market trust that management would stick to getting the basics right.
The big worry, at this juncture, is that Spar’s historical strength in South Africa has become its Achilles heel. To understand that, investors need to dig into that underlying strength.
The franchise-only model allows independent store owners to build community-focused stores that have unique assortments and layouts. The deli is often excellent, while the butchers put a personal touch on things and offer unique options for your next braai. It’s a different shopping experience to your local Woolies Food, which is why Spar actually has the ability to compete. Unlike Pick n Pay, Spar isn’t just the Temu version of Checkers.
But this freedom comes at a price. Store owners can buy from any supplier they want, so Spar’s wholesale business actively competes with other suppliers. Surely that’s shooting yourself in the foot? But if the truck that brings Spar private-label goods also delivers the rest of the store’s needs, retailer loyalty is guaranteed, right? Wrong.
That growth rate is literally in a different postal code to Checkers and Woolworths Food at the moment
As painful as the offshore collapse has been for Spar, it’s the SAP implementation in South Africa that really ripped the heart out of the business. Spar broke the trust of franchisees, evidenced by retailer loyalty in KwaZulu-Natal (the worst-affected region) sitting at just 71.5% vs 84% in the rest of the country. The KZN number at least showed a modest uptick of 29 basis points in the 18 weeks to January 30 2026. But for whatever reason, loyalty in neighbouring countries is trending lower.
What does this really mean? In the 18-week period, retail sales were up 1.7% year on year, yet wholesale sales were up just 0.9%. An investor in the listed company is primarily buying the wholesale sales growth.
Outgoing CEO Angelo Swartz tells the FM that Spar’s independent retail model is a deliberate strategy, and the mission is to remain a wholesaler focused on unleashing the power of independent retail, offering personalised and customised service for the communities it serves. “That is the core of who Spar is — a wholesaler that enables independent entrepreneurs to own and operate their own businesses. This model has created thousands of locally owned enterprises and built one of the most extensive entrepreneurial retail networks in Southern Africa. It has arguably enabled more independent grocery entrepreneurs than any corporate-owned alternative.”
He stresses that the long-term strength of Spar lies in partnership, not corporatisation.
That said, it may not be advisable for shareholders to hope there will be a rush to open new stores. Spar refers to a “modest recovery in the high-income segment” before quoting 1.6% growth to support this assertion. That growth rate is literally in a different postal code to Checkers and Woolworths Food at the moment.
With pressure intensifying, the timing of Swart’s resignation — after 19 years at the group and 2½ as CEO — could hardly be worse. CFO Reeza Isaacs takes over as CEO, while COO Megan Pydigadu, who helped save EOH (now iOCO), moves to CFO. Spar is also looking to hire an MD for Southern Africa, though some may question whether an additional layer of management is the answer to the local problems.
Swartz sees it differently. Incoming leadership, he contends, will inherit a group that is “structurally reset and positioned for the next phase: accelerating operational performance and growth”.
Swartz has told investors that the past five years in particular have required extraordinary focus and intensity, and the role has come at a significant personal cost. His decision to step down was made in full consultation with the chair and the board, “in a disciplined and responsible manner, prioritising organisational needs, stability and long-term strategic continuity”.
Some investors and analysts still question Swartz’s exit, particularly given what one described as “little measurable progress” or a remuneration clawback in South Africa. Swartz rejects this. “That suggestion does not reflect either the mandate I was brought in to deliver or the tangible outcomes achieved,” he says. When he took the role, Spar was emerging from a period of significant disruption, saddled with elevated debt and structural complexity across multiple markets. The brief was clear: stabilise the group, repair the balance sheet, simplify the structure and restore operational resilience.
By his account, the group delivered. By September 2025, group debt had been reduced nearly 50%. Problematic European businesses were disposed of, and the South African business was freed from onerous banking arrangements tied to those offshore operations. And the Irish business continued to grow. “These were not incremental adjustments; they were fundamental structural resets designed to secure the long-term sustainability of the organisation,” Swartz says.
Still, with the latest trading update flagging a worrying picture for margins, it’s likely that the interim numbers will be truly awful. New CEOs in a turnaround scenario tend to throw the kitchen sink at the numbers, so investors might brace themselves.
Spar is going to need a miracle. But, despite what the horribly outdated, unlucky-number “investment case” on the website might say, the market appears to be running out of reasons to believe in that miracle.
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