Spar faces investor exit after $250 million value loss in a week

South Africa’s retail sector is under renewed strain after Spar Group lost about $250 million in market value in a week, sending its shares to a 16-year low and unsettling investors on the Johannesburg Stock Exchange. 

The sharp decline follows a wave of selling that has erased nearly a quarter of the grocery retailer’s market capitalization since last Friday.

The drop has raised fresh questions about leadership stability, earnings pressure and store-level performance at one of the country’s largest food retailers. 

The immediate trigger was the resignation of CEO Angelo Swartz, who said he would step down at the end of February for personal reasons.

Shares fell 7% on the day of the announcement, adding to losses in a consumer sector already grappling with tight household budgets and intense competition. 

Although Thursday was the first session this week in which the stock did not close lower, investor confidence remains fragile as the company works to steady operations and reassure shareholders.

Weak sales growth, thinner margins 

In a trading update for the 18 weeks ended in January, Spar reported like-for-like retail sales growth of 2.25% in South Africa.

Wholesale sales across the region rose just 0.9%, reflecting subdued demand. 

The company said revenue growth during peak trading periods, including Black Friday, came at a cost.

Gross margins were squeezed as the group leaned on promotions to support volumes, a common tactic in a price-sensitive market. 

Swartz will stay on for three months to help stabilize operations in KwaZulu-Natal, where a troubled SAP enterprise resource planning rollout in 2023 and 2024 disrupted supply chains and hurt performance.

Store-level concerns add pressure 

Beyond executive changes, Spar faces operational challenges at store level.

Shoppers and analysts have cited inconsistent merchandising, pricing discrepancies at checkout and uneven fresh produce quality in some outlets — issues that can weigh on brand trust. 

The slide echoes recent volatility at rival Pick n Pay, though Spar’s 25% drop in seven days shows how quickly sentiment can turn.

A modest 3.7% rebound in the latest session offered some relief, but investors are watching closely to see whether it marks a floor or simply a pause in the selloff. 

For now, Spar’s recovery depends on restoring margins, improving execution and convincing the market that its turnaround plan can deliver steadier results.