South African retail giant Spar has posted a substantial loss for the first half of its 2025 financial year, despite actively pursuing a major turnaround strategy.

In financial results published on Wednesday, 4 June, the company reported figures for the 26-week period ending 28 March 2025, revealing ongoing financial strain.

Revenue from Spar’s continuing operations declined by 1.95%, while the cost of goods sold dropped slightly more, by 2.16%. However, operating profit also contracted, falling 5.7% to R1.35 billion. The most striking figure was the retailer’s total comprehensive loss of R4.0 billion—an eye-watering reversal from the R41.6 million profit recorded during the same period last year.

Basic earnings per share also plummeted, swinging from a positive 29.5 cents to a steep loss of 2,211.1 cents—a decline of more than 7,500%.

The primary driver behind this downturn was the R5.03 billion loss attributed to Spar’s discontinued operations, which include its businesses in Switzerland and the United Kingdom. These divisions were recently earmarked for divestment as part of a broader restructuring plan.

To reposition itself for long-term stability and growth, Spar has outlined several key priorities. These include exiting the Polish market, reorganizing group debt, undertaking a strategic reassessment of its European business, and expanding its implementation of the SAP enterprise system.

Among its 2025 milestones, Spar has already achieved three out of five. The sale of SPAR Poland was finalized in January 2025, and its debt restructuring was completed in March. In May, the company also revealed plans to divest from both its Swiss operations and UK-based business, Appleby Westward Group (AWG).

Spar noted that this decision came after a thorough evaluation of its capital allocation strategy and the long-term viability of these operations. “The board believes this realignment supports our focus on core markets in Southern Africa and Ireland,” the group said.

Domestically, the company’s Southern African segment showed slight improvements over the six-month stretch. Wholesale turnover rose by 1.7%, with combined grocery and liquor sales increasing 1.1%. Retail revenue climbed 1.9% overall, with like-for-like sales up 1.6%. However, growth was tempered by several challenges, including subdued food inflation, civil unrest in Mozambique following elections, delayed Easter trading, and temporary store closures in Gauteng.

Spar highlighted that demand remained robust among lower-income consumers, though spending from middle- and upper-income segments lagged behind broader market trends.

One standout performer was SPAR2U, the company’s on-demand delivery app, which saw a 174% surge in order volumes and continued to expand its reach.

Additionally, efficiency gains and tighter cost control helped widen the EBIT margin in Southern Africa, with notable progress at the KwaZulu-Natal distribution center.

Despite these operational advances, Spar has chosen not to issue an interim dividend. The company said it would reassess this decision depending on how macroeconomic and trading conditions evolve in the months ahead.

From a segmental performance, Spar’s Southern African operations achieved marginal growth in this six-month period.

Wholesale turnover increased by 1.7%, while combined grocery and liquor wholesale revenue rose by 1.1%.

Retail revenue increased by 1.9%, like-for-like up 1.6%, in a difficult trading environment affected predominantly by lower food inflation, Mozambique post-election unrest, the timing of Easter falling in the second half of the current year and store closures in Gauteng. 

Spar explained that its growth remained strong in the lower-income customer segments, while the middle and upper segments’ performance lagged the market. 

Positively, the group’s on-demand shopping app, SPAR2U, demonstrated significant progress with a 174% increase in delivery volumes and broad network coverage. 

In addition, ongoing cost and margin improvements contributed to an EBIT margin expansion in Southern Africa, with significant advancements noted at Spar’s KwaZulu-Natal distribution centre.

Spar did not declare an interim dividend for this six-month period but said it will reconsider this decision based on future macroeconomic and operating conditions.

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