Reeza Isaacs, CEO: The SPAR Group.
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The SPAR Group has admitted it allowed its cost base to outgrow revenue for too long and a recovery strategy is built around improving retailer outcomes first, said CEO Reeza Isaacs.
The supermarket franchise and wholesale group, in its interim results for the six months to March 27, 2026, said it is moving to confront historical execution gaps and refocus the business on its core engine: the independent retailer, said Isaacs, who stepped into the CEO role on March 1.
The results and new plans to fix the business appeared to be positively received by the market on Wednesday, with the JSE share price up 4.47% by midday at R54.17, a price that is nevertheless well down from R112.62 a year ago.
The results showed headline earnings a share fell 55.5% to 199,9 cents a share, while net debt increased to R7.3 billion from R5.4bn at September 2025, primarily due to the timing of creditor payments at period end, the SPAR Switzerland loan repayments outflow, and lower earnings before interest, tax, depreciation, and amortisation.
Debt was still well below the R9.8bn peak in 2022. Turnover reflected volume pressure, increasing 2.1% to R67.7bn, although the growth is below the inflation rate.
SPAR's management said early indicators suggest that corrective actions underway were beginning to gain traction. Gross profit growth turned positive in February and March, KZN service levels had improved, SPAR Health grew 26%, and retailer support initiatives provided initial evidence that operational fundamentals were moving in the right direction.
Isaacs said the results reflected a period of significant pressure, with operating profit affected by three main challenges: underperformance in KwaZulu-Natal (KZN), an ineffective Black Friday campaign that failed to deliver a return on investment, and residual balance sheet clean-ups.
"These are not market problems; they are execution problems, and they are fixable. We allowed our cost base to outgrow revenue for too long,” Isaacs said in a statement.
“We also failed to treat retailer profitability as our primary metric. Confronting these issues openly is a necessary step in building credibility and ensuring that future performance is grounded in accountability and measurable execution.”
The group had intensified engagement with independent retailers and the National Guild to ensure retailer concerns were heard and resolved more quickly, he said.
The group would use its scale to buy better, resolve wholesale price disparities, and centrally manage the top 250 key value items to protect retailer availability and competitiveness.
The group was also in the throes of a full review of marketing spend, supported by a return-on-investment framework, to rebuild brand conviction around the community-focused independent retailer.
SPAR2U would be differentiated around a more personalised retail experience, supported by investment in a new platform and the continued growth of digital partnerships.
Retail systems and processes would be modernised to give retailers real-time, store-level reporting and to remove manual processes while reducing operational complexity.
Retailers would also be empowered to improve profitability through benchmarking, staff-scheduling tools, rental-negotiation support, and cost-effective revamps to ease the squeeze on retailer profitability - now the group's primary operating metric.
“These initiatives are not future ambitions. Each program has defined ownership, measurable milestones, and clear operational targets. The group intends to report transparently on progress against these interventions as they mature,” said Reeza.
Meanwhile, in KZN, a stabilisation program had restored three consecutive months of operating profit to close the half, with out-of-stock rates materially improved and a new local perishables model supporting better availability and revenue growth. New leadership is in place across Merchandise, Finance, and Retail Operations.
BWG Foods in Ireland delivered a solid interim performance with sales up 2.2% to €855.7 million and improved gross margins.
SPAR Rewards’ sales grew 9.3% year-on-year, with the SPAR Rewards program now having 12.8 million registered cards, and members spending 74% more per basket than non-members.
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