Staff Writer
SPAR Group Limited has confirmed it has been served with a summons linked to alleged claims arising from the SAP implementation at its KwaZulu-Natal distribution centre. The amount claimed now exceeds the initial R5 million.
The group said most affected KZN retailers have reached amicable settlements, and service levels at the distribution centre have stabilised.
SPAR has revised its SAP rollout strategy. It will now focus on capability enablement instead of distribution centre integration. During the current financial year, the finance function will move to a single SAP environment with one unified chart of accounts.
For the 18 weeks ended 30 January 2026, SPAR reported a 2.1% increase in wholesale turnover from continuing operations. The group operated in a competitive market marked by low food inflation and deflation in key categories.
The company increased promotional activity to support retailers and protect sales volumes. Gross profit margins in Southern Africa declined compared to the previous period. The decline resulted from an unfavourable sales mix, Black Friday promotions and continued investment in loyalty and margin recovery efforts in KZN.
Wholesale sales in Southern Africa grew 0.9% year on year. Liquor sales increased 2.9%. Internal selling price inflation averaged 2.6%, below the official food inflation rate of 4.3%.
Grocery and liquor performance slowed in October after a strong September that benefited from a new retailer rebate scheme introduced in the 2025 financial year. Trading improved in the 13 weeks from November 2025 to January 2026, with sales rising 2.3% year on year.
Build it reported softer festive season trade due to pressure in the construction sector and adverse weather. SPAR Health recorded growth across its wholesale and Scriptwise channels.
Retail sales increased 1.7% year on year, with like-for-like growth of 1.9%. In South Africa, retail sales rose 1.9%, with like-for-like growth of 2.25%.
Year-to-date retailer loyalty stood at 80.9%, excluding neighbouring markets that experienced a slowdown. Including neighbouring markets, total loyalty measured 79.3%.
The high-income segment showed signs of recovery. Like-for-like retail sales improved to 1.6%. The SUPERSPAR format remained steady, with perishables performing better than dry goods.
Retailer loyalty in KZN increased by 0.29% to 71.5% year to date but remains below previous levels. Across the rest of South Africa’s distribution network, loyalty averaged about 84% in the first four months of the 2026 financial year. The group said it continues to focus on improving retailer economics and commercial governance in affected regions.
Margins remain under pressure due to higher operating and wage costs, ongoing systems investment, IT upgrades and the continued SAP rollout in the 2026 financial year.
