Spar International

Yeah, we have a new kitten.

And, um, so first of all Jay's like, "Oh, do you guys walk your cats?" Because he saw, he saw your cat over at Spar being walked.

I was like, "Shut up."

[laughs] Oh, God.

Yeah.

On, had a harness, like, yeah.

And then he said that he saw him in Spar, like they had picked it up, like, and put it ...

Stupid.

And you just have to take a sneak peek at Shoprite's latest results to see that this is a much bigger push into new categories.

So Shoprite opened a net 262 new stores in South Africa last year, more than Pick n Pay, Woolworths, and SPAR combined.

Now, Unique added 13 stores, while Shoprite's al- has also been expanding into pet shop Science, Checkers Outdoor, and baby retailer Little Me.

Now, together, those newer formats grew sales by over 57% last year, compared with just 7.2% across the whole group, although Shoprite didn't disclose Unique sales separately.

Ghost, let's start out with, uh, retail.

Uh, Spar have been in trouble for some while now.

There's certainly been a lot of headwind, and your headline on your, uh, newsletter this morning was quite alarming.

Will Spar survive? Do you have the answer?

Hello, Gary.

Hello, all of the listeners on that side.

Um, yes, I suppose it was a slightly alarming headline, but to be honest, I think there is a lot to worry about, and I say this as a speculative Spar shareholder who has unfortunately ridden down quite a lot of this pain.

I'm kind of waiting to feel good about, uh, you know, climbing back in and hopefully riding it up.

As a result of that rejection, Goldfield shares fell almost 13% on the JSC and funnily enough, Northern Star actually rose, though not as high as its offer.

Now let's cast our eyes to the SPAR Group.

It has warned that its 2026 financial year will come in behind 2025 as its turnaround has not yet delivered enough earnings or cash to offset the pressure on the business.

Now, consumer sentiment remains weak as heart, fuel, utility and interest costs, but which is weighing on the amount of stock that Spar sells to its independent retailers.

And the consumer sentiment is really under pressure because of higher fuel, elevated utility costs.

But SPAR is not saying that our sales are weak.

It's actually telling us that the financial health is independent of its retailers.

So it actually wants to start closing in on its credit losses.

Pick and Pay has a designated CEO, which is good news, I guess.

The bigger picture, beating down food retailers, Pick and Pay, SPAR, they're showing some value.

They're certainly seeing some price action in SPAR.

David Taliat from Investec Sustainable Solutions.

Local EV sales surging.

So let's touch on that everything else there.

I mean, the pick and pay, the share price was surprisingly, I don't know, didn't seem impressed at all.

We've seen some big action in SPAR, particularly last week, some big moves.

Well, it's been a fascinating week for the SPAR group.

They've had the SPAR Guild.

It represents retail outlets that buy their stock from SPAR.

They've said they would like to see Phil Rue take over as chair.

They're recommending other appointments to the board.

But overall, as you said, I think it's a case of some of the independent retailers losing confidence in the board.

as well as the chairperson.

So not a great situation for SPAR at this stage.

You know, uh, the rivals can copy it, but can they copy the fulfillment network? Can they copy store density, the data, what they know about us? Uh, that is gonna take years to catch up.

And to be clear, Woolies Dash, Pick n Pay, ASAP, Spar to you, are all trying, but they're all multiple years behind.

Um, 24 billion of cash generation, absolutely massive, and, uh, you know, and Albrecht has been there since 2017, um, in, in various different guises and, uh, we've got that management continuity.

Uh, weakness, growth was slowing.

Um, there's still market share.

I think there's still market share, and they've been growing, as I said, multiple, you know, uh, for, for 80-plus, uh, uh, months of, of market share growth.

But Spar's currently struggling.

Pick n Pay, uh, struggling and might have a strike.