Over the past year, SPAR’s share price has seen a dramatic decline, plummeting by nearly 50% as the company faces significant challenges, particularly stagnant revenue growth and mounting pressure on margins.
On Monday, February 23, 2026, SPAR provided a trading update covering the 18 weeks ended January 30, 2026. The report indicated a period marked by negligible growth and intensified margin pressures, arising from a fiercely competitive retail environment.
In terms of financial performance, SPAR’s wholesale turnover from its continuing operations recorded a modest increase of 2.1%. However, growth in Southern Africa lagged behind at just 0.9%, reflecting a lack of momentum for the retailer.
Beneath the surface of poor revenue figures lies further distress. The report unveiled a reduction in gross profit margins in Southern Africa, primarily attributed to an unfavorable sales mix and aggressive marketing strategies, including extensive promotions during events like Black Friday.
Additionally, internal selling price inflation averaged 2.6% throughout the reporting period, while official food inflation stood at 4.3%. This discrepancy indicates that SPAR may be struggling to fully transfer rising costs onto consumers or is contending with a deflationary trend in vital product categories.
SPAR is also grappling with a steadily increasing cost structure, which includes wage inflation and substantial investments in IT infrastructure, notably the ongoing rollout of the SAP system. As a result, the company anticipates that its operating margins for the first half of the 2026 financial year will remain pressured compared to the same period last year.
Compounding these challenges, SPAR has recently been served with a summons related to claims from the SAP implementation at its KwaZulu-Natal distribution center. Thirteen retail companies operating SPAR franchises have filed claims seeking tens of millions of rands, arguing that they have been unable to properly stock their stores, generate sales, and have had to source alternative products at inflated costs.
Investor Confidence Wavers for SPAR
The latest trading update triggered a severe decline in SPAR’s share price, dropping by 10%. This downturn is part of a larger trend, with the share price falling by 47% over the past year as investor confidence diminishes amidst the company’s struggle to deliver on its turnaround plans.
To exacerbate the situation, SPAR has encountered considerable leadership instability, losing several top executives in recent years. CEO Angelo Swartz, who took charge in October 2023, is set to depart at the end of this month, marking him as the fourth CEO in a span of five years. His exit follows the brief tenure of Brett Botten, who retired in 2023 after less than two years, as well as the resignation of Max Oliva, who subsequently took on the role of CEO at McDonald’s South Africa.
The combination of these leadership challenges, coupled with slow growth, exit from unsuccessful international operations, and ongoing margin pressures paints a troubling picture for SPAR’s future. Analysts largely agree that while the company’s fundamentals may be intact, it is currently facing a perfect storm of operational and market-related risks.
In late 2025, Absa Corporate and Investment Banking warned that the South African retail market appears to be reaching saturation, indicating that retailers will struggle to achieve growth, positioning expansion efforts as risky endeavors.
Nonetheless, there is a glimmer of hope. Reko Nare of Anchor Capital pointed to potential turnaround narratives that could appeal to certain investors. He highlighted constructive developments, such as SPAR’s exit from operations in Poland, progress on its UK withdrawal, and improved conditions surrounding the SAP software implementation issues. Furthermore, Nare mentioned that share buybacks may be on the table, presenting a positive signal for value investors keen on SPAR’s future.
SPAR One-Year Share Price Performance
