SPAR is stepping up efforts to turn around its Southern African operations while searching for a new chairperson and additional independent non-executive directors, as the group warns that its financial performance for the 2026 financial year (FY) is expected to fall below the previous year.
In an update to shareholders, the retailer said operational improvements were underway but had not yet translated into sufficient earnings or cash benefits to offset continued pressure in its Southern African business, particularly groceries and liquor.
The group said FY2026 was expected to underperform FY2025, with management focused on improving profitability and cash generation, while maintaining appropriate support for its independent retailers.
An independent search firm was assisting assist with the recruitment of a new chairperson and additional independent non-executive directors.
This comes after abrupt resignations of SPAR Group chairman Mike Bosman and deputy chair Dr Shirley Zinn earlier this year with their departures a dramatic culmination of a five-year systemic crisis, fueled by costly offshore missteps, escalating friction with independent franchise owners, and an increasingly brutal domestic retail environment.
SPAR said it had identified several individuals whose skills and experience could contribute to the business, while shareholder and retailer representative structures had also put forward potential candidates.
The group announced that it aims to finalise and announce the appointments by early November 2026, subject to regulatory and shareholder approvals.
Stephan Erasmus, investment analyst at Anchor, said for instance, the board shake-up may be a step in the right direction.
“I think the commitment to recruiting directors with direct retail and independent retailer experience is perhaps a tacit acknowledgement that the SPAR board is in need of more such skills. The key, in my view, is that the new chairperson carries credibility with the independent retailers,” said Erasmus.
While SPAR has had four CEOs in five years, Shoprite and Checkers captured the discount and middle-to-upper segments, powered by aggressive pricing strategies and the rapid expansion of quick-commerce through Checkers Sixty60.
Pick n Pay launched a radical multi-year turnaround strategy under returning CEO Sean Summers.
SPAR said collaboration between the group and its independent retailers was continuing to improve, with a greater focus on shared operational and commercial priorities.
SPAR wholesaler executives and Guild representatives recently spent two days together in KwaZulu Natal working on priorities for retailers and the wholesaler.
The discussions focused on merchandising and pricing, marketing effectiveness, SPAR2U, retailer technology and profitability.
The group said retailers and management had exchanged views openly, worked through practical obstacles and agreed on shared accountability.
SPAR said the initiatives formed part of an integrated recovery plan rather than separate workstreams, with earnings and cash benefits expected to build progressively through FY2027.
The turnaround includes pricing, range and category optimisation, tighter promotional disciplines and improvements in distribution efficiency.
The group is also working to address underperforming corporate stores, with a number expected to be exited during 2026. Cost optimisation initiatives are focused on IT, discretionary spending, marketing and logistics.
The group said remediation of the flooring at its KwaZulu Natal distribution centre had been completed, removing the associated additional lease cost.
SPAR said KwaZulu Natal remained a priority. Month on month improvement in gross margin had been observed. The group's SAP finance deployment is now live and stable.
SPAR said it is also progressing initiatives around SPAR2U, private label and customer relevance. A refreshed SPAR2U proposition has been developed, with a pilot rollout planned for December 2026.
Its private label strategy is being repositioned through changes to the route to market, product range rationalisation and promotional effectiveness, with the aim of improving margins across the value chain.
SPAR said progress would be measured through wholesale growth, operating margin, retailer profitability, service levels, overdue debt, cash generation and leverage.
For the 48 weeks ended August 28, 2026, SPAR said group revenue from merchandise sales had moderated from the interim period.
Southern Africa recorded modest revenue growth, but wholesale volumes and trading remained subdued amid a competitive consumer environment.
Consumer sentiment and wholesale revenue remained under pressure as households faced higher fuel and utility costs as well as elevated interest rates.
The group said BWG, its Irish and UK business, continued to deliver consistent growth in local currency.
However, retailer expected credit losses, specific provisions and write offs to have remained elevated in Southern Africa.
Debt reduction, liquidity and covenant management remain key priorities. The group's FY2026 annual results are expected to be released on or about December 4, 2026.
ashley.lechman@nationalmg.co.za