A FINANCIAL DAILY NEWS COMPANY FOCUS
SPAR has always been a standout in the retail business. It is local, it is friendly, and it has a good range. Some of the stores are basic. Others range to the most luxurious—even more luxurious than Woolworths.
My first impressions of SPAR were formed 40 years ago when I lived in Greenside, Johannesburg, and the SPAR there was run by a friendly person I got to know quite well. Even then, SPAR’s cheese rolls were fantastic. Later on, I worked in a SPAR in Halfway House with a warm entrepreneurial manager who owned the business. The aim back then was to learn the supermarket business from the bottom up so that I could better report on the industry.
It has been fascinating to watch SPAR grow over the years. But what’s troubling now is all the problems they are getting into, such as that SAP disaster, and now the disgruntled retail membership. Let’s take a look at what’s going on.
The dissatisfaction among SPAR retail members seems to come from a mix of cost pressure and supply-chain / systems failures, not just one issue. The strongest evidence points to empty shelves, poor availability, and lost sales after the SAP rollout problems, while cost-of-living and inflation pressures have also squeezed margins and reduced shopper demand.
If you are asking what sits at the core of the dissatisfaction, it is probably trade economics becoming worse for members because supply problems reduced sales while cost pressure stayed high. In plain terms: members are unhappy not only because things are expensive, but because they cannot reliably get the stock they need to sell, and that hits revenue, rebates, and customer trust at the same time. The complaints are less about a single fee and more about a business model that members feel is not delivering enough availability, margin, or predictability.
The reality is that SPAR’s troubles are not just about rising costs. The deeper issue is that the central structure is failing to deliver reliable supply, clean systems, and enough margin to keep independent retailers onside. That is why the complaints from retail members matter so much. When shelves are thin and replenishment falters, the damage shows up first in lost sales and then in strained relations between the centre and the stores.
The Capital Conundrum: Why Did a Guild Choose a Public Listing?
Then, you know, it’s a strange thing that the SPAR group, which is really a big membership of retailers, went for a listing. I don’t know why they did that? Is it really cheaper to raise capital on the JSE rather than from private investors or other sources of finance such as syndicated loans.
One wonders about the JSE being a good source of financing with all the requirements and the pressure from every mom-and-pop tiny investor to large institutional investors? It puts a lot of pressure on a group.
A look at their record shows exactly how much the public market shines a light on these structural cracks. SPAR’s turnover has remained massive, but the earnings line has been incredibly erratic. It reflects the heavy price of those systems disruptions, international disposals, and major write-offs. The clear implication is that the core problem isn’t their sales capacity—people are still buying—but rather the quality of corporate execution behind those sales.
Look at how volatile the five-year financial trajectory has actually been (see main image above). When you see profit after tax diving from R2.0 billion down to R739.5 million by 2025—hit heavily by R350.3 million in goodwill impairments and R232.0 million against right-of-use assets—it highlights a system that is simply not delivering the basics consistently. For a wholesale business built purely on trust with its independent retailers, erratic cash generation and headline earnings are far more serious than a temporary cost hangover.
The Supermarket C-Suite: Uneven Track Records
And we can see, sometimes they blame the CEO, but CEOs of supermarket chains have had an uneven track record in this country. I mean, just take Pick n Pay for one (before the current CEO).
The CEOs of Checkers and Shoprite is different. Their leadership has led to superb operations.
Woolworths has got a new CEO now getting R20 million rand a year. We’ll have to see what his track record will be.
SPAR’s CEO REVOLVING DOOR
And the CEOs of Spar? How many CEOs have they had in the past five years?
If we trace the boardroom revolving door, the group has burned through four different leaders in this short window:
- Graham O’Connor (Stepped down amid governance issues and a fake-takeover scandal).
- Brett Botten (Retired abruptly, taking a massive R25 million total exit payout for just four months of work that final year).
- Angelo Swartz (Appointed to execute a back-to-the-core strategy, clean up the balance sheet, and exit underperforming European assets like Poland, but the grueling turnaround pace saw him exit).
- Moegamat Reeza Isaacs (The former CFO and Woolworths alumnus who has stepped into the hot seat to steady the ship).
With the executive compensation package sitting in the neighborhood of R15.4 million to R18 million a year, SPAR’s leadership is earning JSE-heavyweight money while running an uneasy federation. Currently, the company has managed to slash its net debt by 40% down to R5.4 billion by chopping out its disastrous overseas expansions, but the margin for error is gone.
If the new C-suite wants to keep both the institutional investors and the disgruntled corner store owners from revolting, they have to prove that a publicly listed corporate giant can still protect the thin margins of the independent local grocer.
Chesney Bradshaw is an editor, and journalist. For strategic analysis on economic trends, systemic risk, and corporate governance, visit Idea Accelerator.
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Disclaimer: The information contained in this macroeconomic briefing is for general informational purposes only and does not constitute formal financial, investment, or legal advice.
