SPAR slims its waistline abroad to go full gourmet at home

SPAR’s 2025 results landed with a thud that investors felt in their teeth. A total comprehensive loss of R5.1-billion for the 52 weeks to September and another year without a dividend.

Inside SPAR, though, the message is that this was a cleanup year.

“Our story in 2025 is simple. We went back to our core distribution excellence that empowers independent retail. We simplified the group through strategic disposals. We reduced debt and removed distractions,” CEO Angelo Swartz told investors at the company’s annual results presentation.

Simplification is only part of it. Swartz told Daily Maverick that SPAR was changing how customers understood the brand. For decades, the same “SPAR” signage appeared in vastly different socioeconomic areas, making it difficult to communicate differentiated value.

He said the current shift was about aligning what the consumer saw with what they could expect inside the store.

“Many of our stores already offer gourmet-type offerings,” he said, pointing to outlets in Cape Town like Sea Point and Cape Quarter. The new format allowed Spar to make that distinction explicit and tell its premium story, while freeing the core SPAR banner to speak more directly to price-focused shoppers.

The European exit

One of SPAR’s most significant moves this year was closing out its long-running difficulties in Europe.

The exit began in Poland, where a recapitalisation before the sale generated a significant loss. Switzerland followed in September after years of underperformance worsened by high cross-border shopping and the effects of a cyberattack. The UK business remains held up for sale.

Together, these discontinued operations produced losses of R5.6-billion.

Read more: Spar’s reset continues – but dividends remain off the table

“The sale of Poland and Switzerland has resulted in a much simplified group,” CFO Reeza Isaacs said. “These business did not fit the investment thesis of the group and were a drag on not just capital and returns, but also management time.”

The disposals also cut net debt by 40% to R5.4-billion, giving SPAR balance sheet breathing room.

Europe out, Zimbali in

Freed from European distractions, SPAR turned its attention homeward and unveiled its first Spar Gourmet store at the Zimbali Oasis with retailer Mark Anderson this November.

Swartz described the new format as built for “higher frequency, premium, convenience shopping” and the kind of spending that is “less elastic to price”.

The launch, he said, was symbolically important as the first SuperSPAR opened in Ballito 25 years ago. “Exactly a quarter of a century later, opening another new brand in Ballito is really special.”

Gourmet stores emphasise the customer experience with in-house bakeries, artisanal pâtisserie from Milk & Honey, bespoke coffee through a partnership with Vida, and premium frozen meals via Frozen For You.

South African consumers were showing a renewed appetite for artisanal specialties, Swartz said – a natural swing of the retail pendulum as shoppers sought out quality, expertise and specific cuts or products that mass formats tended to simplify.

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Positioned alongside SPAR’s value format, SaveMor, the Gourmet concept provides strategic coverage. The pairing aims to prevent customer losses to premium competitors on one end and to stem the migration of customers toward budget-focused discounters on the other.

SPAR would roll out three to four Gourmet stores in 2026, focused in Cape Town and Johannesburg, followed over the medium term by 70 to 100 Gourmet stores nationally, combining conversions and new builds, Swartz told Daily Maverick.

‘Only at SPAR’

The premium push builds on SPAR’s “Only at SPAR” counters such as Food Stall, Chikka Chicken, Fire & Grill and Bean Tree. Swartz said these were designed to create “reasons to enter the store, not just reasons to pay”.

Coffee, he noted, had become a “powerful footfall catalyst”, with Ireland already testing the higher-end Brevato brand to lift basket value.

Complementing that was Frozen For You, a fast-growing premium convenience meal brand available in-store and via the SPAR2U delivery app.

Pet treats and subscriptions

SPAR’s gourmet offering is not limited to humans. Pet Storey, launched in September, reflects what Swartz described not as a luxury play, but a response to a rapidly maturing category long dominated by independents.

He framed it as part of SPAR’s purpose to support independent entrepreneurs in a market disrupted by corporate chains. Pet Storey’s “toy-store-for-pets” model – gourmet treats, tasting stations and the “Bone Appetit” deli – were designed to give independents a platform and brand ecosystem to compete.

The group had 12 stores and expected around 15 by December, with a strong pipeline, chief operating officer Megan Pydigadu stated.

Read more: Woolworths given free rein to collar Absolute Pets

Meanwhile, SPAR Health grew revenue 13.2% and aims to double its pharmacy network by 2028.

Digital convenience also expanded. SPAR2U grew deliveries by 136%. Rather than chase the model of standalone last-mile delivery, SPAR also plugged into Uber Eats in March.

Competing in the premium lane

The group’s upper-end customer segment “lagged the market” during the reporting year, which is a sign that Checkers’ innovation and Woolworths’ premium dominance have been eroding SPAR’s share.

Now, with Europe (mostly) gone and capital staying home, the group believes it can compete on premium again. Swartz said that success depended on clarity of identity where retailers that gave customers certainty about who they were and what to expect, would win.

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SPAR’s reset strengthened its finances, even as the dividend blackout continues. Isaacs indicated buybacks may come before a new payout policy.

“As we stabilise marginal earnings, we will return value to shareholders in a disciplined manner, not at the expense of long term resilience,” Swartz said.

The switch to a streamlined portfolio is a welcome one, but SPAR seems to be constantly playing catch-up to rivals Shoprite and Woolworths – always the last to the table. We’ve seen this play out in the deliveries space, in the rollout of pharmacies and now in the move towards a gourmet market and pet food.

The next year will reveal whether SPAR’s lighter frame, and its Gourmet ambition, is enough to pull consumers back into the fold. DM