South Africa’s SPAR moves to cut jobs amid weak sales and rising costs

SPAR Group Limited has begun a retrenchment process and introduced a voluntary severance program in parts of its business as the retailer moves to cut costs and steady operations. The company said the plan is meant to align expenses with weaker trading conditions and position the group for sustainable growth. It stressed that the measures do not affect independent store owners or services provided to its retail network.

Management cited intense competition, falling prices in some product categories, tight household budgets, and the slow recovery in KwaZulu-Natal following repeated floods as key pressures on performance. The retailer is also still dealing with the fallout from a failed SAP software rollout that disrupted supply chains and wiped out about R1.6 billion ($95 million) in turnover in 2023. Executives say restoring reliability to distribution remains a priority as the company works to rebuild supplier and customer confidence.

Dual retail-wholesale model complicates growth

At a recent annual general meeting, chair Mike Bosman said former CEO Swartz’s sudden exit reflected personal reasons and the strain of leading a company with a sharply weaker share price. Finance chief Reeza Isaacs will succeed him as CEO. Margins have been pressured by heavy discounting during the 2025 Black Friday period, when sales fell short of expectations. The group employs 6,778 people, about two-thirds in Southern Africa and the rest in Ireland, excluding franchise staff.

Shareholder frustration was evident at the meeting, where 61 percent voted against the executive pay policy. Much of the opposition centered on a proposed R9.5 million ($0.56 million) payout to former CFO Mark Godfrey, who resigned in December 2024. Investors have also pointed to the group’s complex structure—operating as both wholesaler and retailer—as a challenge, particularly in Ireland, where it runs six retail brands alongside wholesale and food-service operations. 

SPAR moves to rebuild revenue

Founded in the 1960s, SPAR has expanded through acquisitions and organic growth into one of Southern Africa’s largest retail groups. Its portfolio includes Express, KwikSpar, SuperSpar, Spar and Gourmet stores. Across the region, it supports about 2,500 Spar outlets, roughly 400 Build it hardware stores, 800 Tops liquor outlets and six distribution centers. As Isaacs prepares to take the helm, investors will be watching closely for a clear plan to restore revenue growth, rebuild margins and stabilize the share price after several difficult years.