Spar starts retrenchment process to slash costs

Retailer Spar says it will launch a voluntary severance programme in certain parts of the business to improve operational efficiency and competitiveness.

This is part of a broader reset aimed at aligning Spar’s cost base with current trading conditions and “to ensure that Spar is structured appropriately in order to support future sustainable growth”.

“The process does not affect the group’s retailers or services provided to Spar’s retail network,” the company said in a Sens notice.

The share price has fallen 46% over the last 12 months after a disappointing trading update and the shock resignation of CEO Angelo Swartz in February.

ALSO READ: Spar chair Mike Bosman shares inside story of shock CEO departure

The company blames fierce competition, deflation in certain categories, tight consumer spending and sluggish recovery in KwaZulu-Natal after repeated floods.

Prior to that, a bungled SAP software implementation was blamed for supply chain breakdowns and a turnover loss of R1.6 billion in 2023.

Group chair Mike Bosman, speaking at a recent AGM, described the sudden departure of Swartz – who will be replaced by CFO Reeza Isaacs – as partly personal and partly due to the strain of helming a business whose share price had been severely hammered.

The group’s retail margins have been under pressure, in part due to promotional strategies over the Black Friday period in 2025, when trading was worse than expected.

The group has 6 778 staff, about two-thirds of them in southern Africa and the rest in Ireland.

This does not include employees at the independent Spar retail stores, which operate under a franchise model.

There was dissent at the recent AGM, with 61% voting against the proposed executive pay policy. The disquiet appears to have been triggered by a proposed R9.5 million payout to outgoing CFO Mark Godfrey, who resigned in December 2024.

ALSO READ: Spar shareholders unhappy with how much executives are set to earn

Part of the problem faced by the group is its complex business nature, falling somewhere between a wholesaler and a retailer.

In Ireland, it operates six retail brands, a wholesale arm, and a food services business. In southern Africa, it has 2 500 Spar outlets, around 400 Build it stores, 800 Tops liquor outlets, and six regional distribution centres.

The group owns multiple well-known brands, including Express, KwikSpar, SuperSpar, Spar, and Gourmet.

To arrest the cratering share price, incoming CEO Isaacs will need to articulate a clear vision for the group and outline how revenue and margins can be restored to respectability after several dismal years.

This article was republished from Moneyweb. Read the original here.