Grocery retailer, SPAR Group says it has navigated a challenging trading environment across its geographies, reporting a decrease in total sales of 1.6% for the 18 weeks ended January 2025.
Despite this drop, the group said focused cost control and promotional activities helped improve operating margins.
SPAR Southern Africa saw retail sales grow by 3.4%, with same-store sales increasing by 3.0%, slightly ahead of the national inflation rate.
The growth was particularly strong in lower-income grocery stores, while growth in middle- and higher-end stores was more subdued, it said.
Sales were impacted by the planned closure of 13 grocery stores in the South Rand region, as well as erratic supply to Mozambique and a reduction in promotional activity.
Despite these challenges, operating losses from corporate grocery and liquor stores decreased, driven by improved performance and the closure of non-performing stores, the retailer said.
A bright spot in the performance was the solid growth of SPAR’s on-demand shopping platform, SPAR2U, which saw order volumes rise by 285% compared to the previous period.
The Build it division delivered a strong top-line growth of 7.3%, and the pharmaceutical business grew by 13.3%, driven by Wholesaler and Scriptwise sales.
The KwaZulu-Natal (KZN) region also experienced a positive recovery thanks to targeted interventions and system modifications.
This resulted in improved loyalty levels, with both gross profit and trading profit margins seeing positive growth.
Sales Breakdown:
-Grocery: +0.6%
-TOPS/Liquor: +1.9%
-Combined Grocery and Liquor: +0.8%
-Build it: +7.3%
-SPAR Health: +13.3%
-Southern Africa: +1.6%
-BWG Group (Ireland and South West England): -6.7%
-Switzerland: -9.0%
-Group Total: -1.6%
International Operations:
BWG Group: Operating across Ireland and South West England, the BWG Group saw a 1.6% decrease in sales in EUR terms, largely due to a shift in consumer spending toward larger supermarket formats.
SPAR Switzerland: The Swiss division saw a turnover decrease of 5.2% in CHF terms, impacted by increased living costs and intensified competition.
SPAR said it has made significant strides in its strategic priorities, including the finaliation of the disposal of SPAR Poland on 31 January 2025.
“The ongoing European strategic review, which is set to be completed by June 2025, is progressing according to plan, aligning with the company’s refined capital allocation framework.”
The group has also resolved system issues in KwaZulu-Natal, improving pricing visibility. The next phase of the SAP system rollout will focus on the Build it Imports Warehouse and the Eastern Cape distribution centre in the first half of 2026, it said.
“The ongoing recovery in Southern Africa’s margins will be supported by improved performance in the KZN distribution centre, the closure of non-performing stores, and enhanced operational efficiencies,” the group said.
SPAR said it will publish its interim financial results for the six months ending 31 March 2025 on or around Wednesday, 4 June 2025.
Shares in the group are up as much as 39% over the past year but are down nearly 7% in the year-to-date period.
