South African retail group SPAR has unveiled plans to introduce a voluntary severance scheme in selected parts of its operations as it works to rein in costs and stabilise its business.

In a notice to shareholders on Tuesday, 17 March 2026, the company said the initiative forms part of a broader turnaround effort aimed at restoring competitiveness and improving its financial position.

According to SPAR, the programme is intended to better match its cost structure to current market conditions while ensuring the business is positioned for sustainable long-term growth. The group emphasised that the process will not impact independently owned SPAR stores or the services provided to its retail network.

The retailer added that its priority remains improving operational efficiency while continuing to support its network of independent store owners. It did not specify which divisions would be affected by the voluntary severance offer.

SPAR’s 2025 annual report shows the scale of its workforce, with 4,657 permanent employees across its Southern African operations, which include South Africa, Namibia, Botswana, Mozambique, Eswatini and Lesotho. In Ireland, the group employs 2,121 people across 1,161 stores and 26 distribution centres.

The move comes as SPAR continues efforts to turn around its performance after a challenging period. In its latest trading update covering the 18 weeks to 30 January 2026, the company reported sluggish growth and ongoing pressure on margins in a highly competitive retail environment.

Turnover increased by just 2.1%, while profitability came under strain. SPAR attributed the margin decline to a weaker sales mix, the impact of promotional campaigns during the Black Friday period, and continued investment in loyalty programmes and margin recovery initiatives in KwaZulu-Natal.

At the same time, the group highlighted rising operating costs, including higher wages and sustained spending on IT upgrades and the rollout of its SAP system.

SPAR said it has identified several structural measures to bring its cost base in line with current trading conditions and its medium-term profitability targets, with the voluntary severance programme forming a key part of that strategy.

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