Aisles of pain at one of South Africa’s biggest food retailers

SPAR’s share price has halved over the last year as it battles numerous challenges, including lacklustre revenue growth and margin pressure.

On Monday, 23 February 2026, SPAR released a trading update for the 18 weeks ended 30 January 2026.

It highlighted a period of stagnant growth and significant margin pressure within a highly competitive retail landscape.

Group wholesale turnover from continuing operations increased by 2.1%, and Southern Africa’s performance was muted at just 0.9% growth.

Poor revenue growth was only the start of the problems. The remaining results showed mounting strain at the retailer.

Gross profit margins in Southern Africa fell due to an unfavourable sales mix and aggressive promotional strategies, such as Black Friday.

Internal selling price inflation averaged 2.6% over the period, compared to the official food inflation, which measured 4.3%.

This suggests that SPAR is not fully passing on cost increases to consumers or is operating in a highly deflationary environment for key categories.

It is also facing a significantly rising cost base, which includes wage inflation and continued heavy investment in IT infrastructure and the SAP system rollout.

SPAR expects operating margin performance for the first half of the 2026 financial year to remain under pressure relative to the prior comparable period.

To make matters worse, SPAR has been served with a summons for claims arising from the SAP implementation at its KwaZulu-Natal distribution centre.

Thirteen retail companies which operate SPAR franchises want tens of millions of rands from the retailer.

They said they were not able to adequately stock their stores, make sales to generate a profit, and had to secure alternative merchandise at a premium.

Investors have seen enough from SPAR

The latest trading update from SPAR sent the share price plummeting 10%. However, this was not an isolated event.

SPAR’s share price has declined by 47% over the last year as investors have lost trust in the company’s turnaround promises.

To add to its misery, the retailer has also faced leadership issues, losing some of its top executives over the past few years.

SPAR CEO Angelo Swartz, who took the reins in October 2023, will leave the company at the end of the month.

Swartz was SPAR’s fourth CEO in five years. His departure follows the 2023 retirement of Brett Botten, who left after less than two years at the helm.

Last year, SPAR South Africa’s chief executive, Max Oliva, resigned. He subsequently became the CEO of McDonald’s South Africa.

The combination of leadership challenges, slow growth, exiting its struggling international operations, and margin pressure does not bode well for the company.

The prevailing sentiment among top analysts is that while SPAR’s fundamentals are holding up, it is navigating a perfect storm of execution and market risks.

Absa Corporate and Investment Banking warned in late 2025 that the South African retail market is reaching saturation.

This means that retailers will find it difficult to show growth and that expansion comes with significant risk.

However, it is not all doom and gloom. Reko Nare from Anchor Capital said there is a turnaround story which some investors may like.

He said there were several constructive developments, including SPAR’s Poland exit, progress on the UK exit, and the de-escalation of SAP software implementation issues.

Nare added that potential share buybacks are on the table, which is a positive sign for many value investors.

SPAR one-year share price