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This interview was originally aired on RSG Geldsake in English, with an Afrikaans introduction that has been translated into English here.
RYK VAN NIEKERK: Retail group Spar is one of the biggest retail groups in the country. It has six large distribution centres delivering products to 2 550 independent stores. That is considerably more than Pick n Pay’s 1 600 stores.
In 1932 the group originally opened a single shop in the Netherlands. Its name refers to a type of tree called the Silver Spar tree in English. It is a fir tree and that’s of course Spar’s logo.
In 1960 Spar entered the SA market when eight wholesalers gained the rights to sell their products under the Spar brand.
Today, 8 December 2025, the group announced its results for the year to end-September 2025. Turnover was basically unchanged at R13 billion, Heps [headline earnings per share] 30% lower and no dividend was declared. But the big news is that the group has cut it debt burden by R4 billion.
Spar CEO Angelo Swartz is on the line. Angelo, thank you so much for your time. It’s been a few tough years for Spar due to the performance of international businesses and a very poor SAP [software] implementation at one of your distribution centres here in South Africa.
But let’s talk first about the international businesses in Poland and Switzerland. They were really performing very poorly. You’ve sold those businesses. Are they now completely off your balance sheet?
ANGELO SWARTZ: They are. Thank you for that really interesting intro. It’s something I do know, but I’m glad to know that now it ties a few things together for me too.
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Yes, both businesses are now completely off our balance sheet. We handed over the Polish business on the 1st of February this year, and handed over the Swiss business on the 8th of September this year.
RYK VAN NIEKERK: It’s been interesting that South African retailers have struggled internationally. Woolies is another example. They had a bit of a disaster Down Under. Why do you think that is the case?
ANGELO SWARTZ: Ryk, that’s a very interesting question. I can talk from the experience of having seen this work and not work.
Roughly 12 years ago we started an expansion into Europe with our purchase of Spar Ireland or the BWG Group. That particular acquisition has worked really, really well for us and continues to be a big part of our group plan.
But the expansion into Switzerland and Poland – looking back, we’ve learned some lessons, and I think the key lesson for South Africa is that the strength of local management teams is so key.
Having people on the ground who understand local conditions and local consumer mindset is fundamental to success in any market.
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And if I were to ascribe our challenges – as well as our positives – in overseas expansion, it would be that. It would be primarily based on understanding local conditions through strong local management teams who know the conditions on the ground.
Secondly, I think the other big lesson is gearing and the level of gearing one takes when taking on overseas operations is key, and understanding capital allocation and the relative returns as can be seen in our Swiss business where, despite the business being generally profit-making, the level of return just wasn’t sufficient to make up for the size of debt we had in that geography.
RYK VAN NIEKERK: Back home you had some issues at one of your big distribution centres in KZN, where an SAP implementation went horribly wrong. Just give us the background. When did you start that implementation and what went wrong?
ANGELO SWARTZ: We have been on SAP for some time now – probably the better part of 15 years. We’ve run our general ledger and our financial backbone on an SAP module. But in the last five years or so, we’ve realised that our current ERP [enterprise resource planning] system is coming to end of life, and we needed to find a solution in the ERP space.
We did an extensive market survey and decided that SAP was the right ERP for our application.
So we implemented the first instance at one of our six distribution centres, the one in KZN, at the beginning of February 2023. It was a challenge, to say the least.
Read:
SAP rollout bungle costs Spar R1.6bn [Nov 2023]
Spar loses information technology chief after SAP bungle [Sep 2023]
The worst is now behind us and we were profitable in that distribution centre in this financial year. But it was a very tough lesson to learn.
RYK VAN NIEKERK: Did SAP have to pay penalties? Were you insured? Have you summed up how much this has actually cost?
ANGELO SWARTZ: Unfortunately not, Ryk. So we won’t be insured against this and we won’t be able to recover anything from SAP.
We estimate that the cost of the implementation was probably somewhere around three-quarters of a billion rand over two years.
RYK VAN NIEKERK: Let’s talk about the retail market in South Africa. Its dynamics are very, very interesting.
We have Shoprite, which is rolling out very, very aggressively, opening stores virtually every single business day. We have Pick n Pay which had some issues, but it seems that under Sean Summers Pick n Pay is turning around slowly.
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How Checkers Hyper stole a march on the original, Pick n Pay
Why shoppers and suppliers need a strong Pick n Pay
Ackerman praises Summers’s ‘extraordinary leadership’ as PnP turnaround accelerates
And at Spar you’ve had your fair share of problems, but it seems like you’ve now addressed most of those. What is your strategy going forward?
ANGELO SWARTZ: Ryk, I prefer not to talk about our competitors. I think Spar is a very different business from our competitors. While we compete with them at a retail level, fundamentally as a corporate business and a corporate entity we are a wholesaler to independent retailers.
I think our strategy going forward is really to focus on the success of our independent retailers.
We really see our purpose as being to unleash the power of independent retail.
We think local entrepreneurs play a vital role in South Africa’s economy, and so our focus and energy is going to be poured into revitalising and strengthening our independent retail base.
Read: Spar lifts earnings, but no dividend yet
And that’s really, I think, in the end our differentiator. It means that our offerings at store level are customerised and personalised to the communities they serve – by and large, our retailers or members of the communities they live and work in. And we think that is a key differentiator for Spar.
RYK VAN NIEKERK: That’s a very different model from the other retailers in the country. So Spar predominantly is a wholesaler, as you’ve said, and the store owners are totally independent. Are they franchisees or totally independent?
ANGELO SWARTZ: They are independent retailers. We refer to it internally as a ‘voluntary buying organisation’.
And so our members sign a membership agreement with Spar and become members of the Spar Guild of Southern Africa. That comes with certain commitments in terms of store standards, food safety standards, store aesthetic appeal, et cetera.
But it is not as strict as a franchise relationship, so stores are allowed to customise and personalise.
RYK VAN NIEKERK: Is this model unique to Spar? Is it also common elsewhere in the world?
ANGELO SWARTZ: Insofar as I know it is relatively unique to Spar. There are similar models out there, but none with quite this focus on independent retailers.
RYK VAN NIEKERK: Just lastly, the future. Your head is now out from under the bonnet. [Both chuckle.] You can now look at strategic issues and expand. What are your short- and medium-term plans?
ANGELO SWARTZ: Ryk, when this management team took over two years ago, we set out some key priorities. There were five of them. I think we’ve done a good job in addressing them.
The first one was the exit from Poland. We were very sure, coming into the operations, that Poland was not a market in which we wanted to extend our stay. So we’ve been able to dispose of that business from the first of February this year.
Listen: Spar turn around still a work in progress
The second issue was we wanted to create clarity in terms of our positioning in the rest of our European portfolio – Ireland, the UK and Switzerland – and we provided that clarity.
We’ve now disposed of the Swiss operation.
We are in the process of disposing of our English operation, although that one is relatively small. We’ve decided that Ireland is one of our core markets. So that is another big tick for us, being able to sort that out.
The third issue was debt, as you mentioned. When we took over, the business was highly geared and highly indebted. I think in the two years we’ve done a great job in terms of reducing the amount of debt in the business.
As you mentioned, at close of our financial year this year our debt would be circa 40% lower than it was this time last year, which I think is a significant achievement.
Listen: Spar not looking for further expansion outside Southern Africa – Swartz
There were two priorities that were medium-term priorities. We are rolling out SAPs to our other five distribution centres, as I mentioned. Our current ERP system is coming towards its end of life, so it’s key that we replace that quickly. And so for the year ahead one big focus area for us is modernising our ERP systems.
And secondly, which is the fifth priority, is returning the South African business to 3% net profit, and so that will be a focus area of ours.
We had hoped to have done that by the second half of 2026, but we’ve looked at it prudently and said it’s more realistic to expect that in the full 2028 financial year.
Listen/read:
Who moved Spar’s cheese?
Spar turnaround still a work in progress
And so those two areas I think in the short term are going to be where a lot of our energy goes. But together with that, we have lots of exciting initiatives happening.
We are revitalising our SaveMor brand and looking for a relatively fast roll out of that.
We have just launched our first high-end store called Spar Gourmet that we’re looking at expanding the footprint of, and then the extension of our pets business.
We bought the pets business earlier this year and created a pets brand called Pet Storey that I think can be a home for independent pet retailers, and we really have a strong pipeline and outlook for growth there.
And so driving that in the next year or two is also going to be a big focus for us.
RYK VAN NIEKERK: Did you have a good Black Friday?
ANGELO SWARTZ: Black Friday was excellent. It was a record Black Friday for Spar. We see demand way outstrip supply, which is a good problem to have. And I think it was a really momentous Black Friday November month for us.
RYK VAN NIEKERK: Angelo, thank you so much. That was Angelo Swartz, the CEO of Spar.
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