Spar says 2026 earnings will lag as southern Africa turnaround pressures persist

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Spar 2026 earnings outlook

Highlights

Spar forecasts 2026 earnings to fall below 2025 levels due to ongoing southern Africa turnaround pressures, despite operational improvements and debt covenant renegotiations.
For the 48 weeks ending 28 August 2026, Spar's southern Africa business reports modest revenue growth but continued subdued wholesale volumes amid competitive consumer headwinds and higher input costs.
Spar launches a refreshed SPAR2U delivery pilot for December 2026 and reports SAP finance system stability at its central office and four distribution centres to support efficiency gains.

Turnaround plan and board changes

As reported by Moneyweb, Spar says results for the 2026 financial year ending in late September will fall short of 2025, even as management focuses on improving profitability and cash generation in southern Africa while continuing support for retailers.

The group says its operational turnaround plans are under way, but earnings do not yet reflect their implementation. It has renegotiated debt covenants with lenders and says it expects to meet the new terms, while also indicating that net debt should decline in the second half of its financial year from March compared with the first half of 2026.

Provisions continue to weigh on debt levels, including amounts set aside for expected retail credit losses. As a wholesaler, Spar supplies retailers on credit, leaving it exposed when some customers struggle to settle their debts.

Spar also says it is working to appoint a new board chair and additional board members by November 2026. The company says candidates are being assessed through the same process and that it remains committed to an independent, rigorous and transparent appointment procedure.

Consumer strain and competitive pressure

For the 48 weeks ended 28 August 2026, Spar says its southern Africa business records modest revenue growth, with wholesale volumes and trading still subdued in a highly competitive consumer market. The group says revenue remains under pressure as shoppers face higher fuel and electricity costs as well as elevated interest rates.

The company is repositioning its private label range, which is typically more affordable for consumers, as it looks to improve margins across the value chain. Spar says its SPAR2U delivery service has been refreshed in partnership with a retailer advisory group, with a pilot rollout planned for December.

The move comes as Spar faces rising pressure from Shoprite's on-demand service Sixty60, while its convenience model, built around stores close to suburban areas, comes under strain as more consumers shift to delivery. Spar also says its SAP finance software system is now live and stable at its central office and four distribution centres, with three of those sites going live in early August.

South Africa’s bond-market rebound and improving investor sentiment were previously covered by our publication as signs the country may be entering a more credible recovery phase after years of weak governance and corruption. We noted that markets appeared to be separating political noise from financial opportunity, which could strengthen South Africa’s access to international capital if sustained.

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