Spar Sheds R4 Billion in a Week as CEO Exit and Margin Sacrifice Spook Investors

It has been a brutal week for the Spar Group, South Africa’s second-largest grocery retailer by turnover.

Since last Friday, the company has lost nearly a quarter of its market valueapproximately R4 billion wiped out. Shares are now trading at their lowest level in 16 years.

The Spark

The selloff was ignited a week ago by the shock announcement that CEO Angelo Swartz had resigned and would leave at the end of February. Shares dropped 7% on the day.

Swartz told investors on Monday that he had resigned for personal reasons. He will remain engaged with the group for the next three months, specifically focused on helping stabilise the KwaZulu-Natal region, which is still battling to recover from a disastrous implementation of the SAP enterprise resource planning system in 2023 and 2024.

The Trading Update

The bad news kept coming. On Monday, Spar released a trading update for the 18 weeks to the end of January.

The numbers revealed pressure beneath the surface:

• Retail sales in South Africa grew by a modest 2.25% on a like-for-like basis

• Wholesale sales across the region were up by a “muted” 0.9%

More concerning, the group admitted that while topline growthparticularly during the peak Black Friday trading periodwas solid, it had sacrificed gross margin to achieve this. In plain language: Spar sold more, but earned less on each sale.

The Market Reaction

Investors did not like what they heard. The share price continued its downward slide through the week.

Thursday was the first trading day since Wednesday where the retailer’s shares did not end lower, closing up 3.7% . But the damage is done.

The group’s market value has dropped from R17.44 billion to R13.37 billion.

The KZN Hangover

Spar’s KwaZulu-Natal operations remain a significant drag. The disastrous SAP implementation in 2023 and 2024 disrupted supply chains, frustrated retailers, and damaged relationships. Swartz’s extended focus on the region during his notice period underscores just how criticaland how troubledthis area remains.

The Bottom Line

Spar is not in crisis, but it is under severe pressure. A CEO departure. A margin squeeze. A regional operation in recovery mode. And a share price at 16-year lows.

The question for investors is whether this is a buying opportunity or a warning sign. For Spar, the task is to stabilise, restore confidence, and prove that the R4 billion loss in value was an overreactionnot a new reality.