Spar reports losses as it loses higher-income customers to competitors
The Spar Group has posted a R4 billion loss in its half-year results, as it looks to sell its British and Swiss businesses.
Spar storefront. Image: Wikimedia Commons - Karol Szejner
The Money Show's Stephen Grootes interviews Angelo Swartz, CEO of the Spar Group.
Spar has posted a R4 billion loss in its half-year results, as the Group looks to sell its British and Swiss businesses.
Group revenue for the six months to 28 March rose slightly to R66.1 billion.
Operating profit grew by 1.6% to R1.5 billion - supported, Spar says, by improved cost discipline.
Headline earnings per share (HEPS) from continuing operations showed a marginal 0.4% decrease to 450.1 cents.
No interim dividend was declared for the period.
In the Southern African division, wholesale turnover increased by 1.7%, while retail revenue increased by 1.9%.
Spar says growth remained strong in the lower income customer segments, while the middle and upper segments' performance lagged the market.
Build it, South Africa's largest building materials retail brand, recorded solid growth, increasing sales by 4.1% and retail LFL (like for like) growth of 5.4%, despite a difficult economic environment.
While macroeconomic challenges remain, the Group expects continued margin improvement in the second half of the financial year ending 26September 2025 as operational efficiency initiatives mature.
Spar CEO Angelo Swartz says the Group experienced a tough operating environment particularly in its European operations, while the South African consumer remains under pressure as well.
"There's a cost of living crisis in Europe that's made those markets tougher than I can remember. In South Africa we've had an economy that's been struggling to grow for some time and consumers are under real financial pressure with relatively high interest rates, albeit coming down."
Angelo Swartz, CEO - Spar Group
Commenting on Spar's apparent loss of upper-income shoppers, Swartz acknowledges the extremely competitive environment in the retail space.
"There's certainly truth in the observation that growth in our stores that cater to the lower end of the market has been more robust than at the top end. It's been more competitive at the higher end of the market, most certainly for us".
Angelo Swartz, CEO - Spar Group
"I don't think it's set for the long term, but that's what we've experienced in the short term."
Angelo Swartz, CEO - Spar Group
Considering the importance of price for the average consumer, Grootes asks about Spar's internal inflation figures compared to competitors for example like Shoprite (1.9% to end-December 2025) and Pick n Pay (2.1% till end-March 2025).
Spar's internal inflation for groceries came in just over 2%, and slightly higher at just over 3% for building materials, Swartz says.
"I think prices are quite important for all grocers and supermarket groups at the moment, and to some extent will always be in an economy like SA, so we definitely compete on price."
Angelo Swartz, CEO - Spar Group
"However, that is not our primary goal - we pride ourselves that the vast majority of our stores are privately owned by families who operate and often live in the communities they serve, so I think our ability to customise and talk to the consumer in the way they are familiar with, and genuinely partake in the betterment of those communities is really what we pride ourselves on."
Angelo Swartz, CEO - Spar Group
Scroll up to the audio player to listen to the interview with the Spar Group CEO