Wholesaler Spar is to offer loans to corporate-owned shops that require financial assistance, it said on Friday.
It is lending R250m to shops in Namibia, including the Spar shops and Build It franchise. It is also offering R114m in loans to mostly corporate-owned shops in SA.
The loans are a fraction of its R10bn in group debt and its annual operating profit of R1.8bn reported in 2023.
Spar sells food and liquor products primarily to more than 2,000 franchises, but the group does own some of its shops.
The loans suggest some of these outlets are not performing. SA supermarkets are struggling from competition from Checkers’ on-demand delivery and strong digital presence with personalised promotions based on shoppers’ habits recorded on their loyalty cards.
Checkers delivery competes with Spar stores that previously had a competitive advantage by offering convenience. Spars are usually located in suburbs close to homes or near busy office areas.
Spar said it is also offering up €640,000 (R13.5m) in security to secure a lease in Poland, where it has a “strategic” retail site.
This decision was announced as it seeks to exit the unprofitable eastern European business that never made a profit and has a retail market share of less than 3% in that country. It has too small a footprint to make inroads.
Spar bought the wholesale business and some stores named Piotr i Pawel in 2019.
To leave Poland, Spar has to repay about R1.3bn in debt held in that country. It has been looking for a buyer.
The company’s share price was 1.18% lower at R96.50 at close of trade on Friday.
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