Spar is placing renewed emphasis on its private-label business as part of a broader strategy to lift margins, support retailer profitability, and regain momentum after a challenging period.
While the retailer’s interim results to March disappointed investors, newly appointed CEO Reeza Isaacs says the group has identified several levers to reignite growth. Central among these is a more aggressive push into own-brand products.
“Private label is one of the most significant growth opportunities available to us,” Isaacs said.
Three years ago, Spar bought Encore, a private-label manufacturing business, but Isaacs acknowledged the group had yet to fully capitalise on the acquisition, with the operation still largely functioning independently of the broader organisation.
“Ww have not yet done a proper post-merger integration,” he said. “There is enormous opportunity.”
Private-label products account for about 22% of Spar’s total sales.
Isaacs wants to bring that closer to 30%, aligning with global retail trends in which own-brand ranges have steadily gained share as consumers seek better value.
“Retailers want more private labels in certain categories. There is an opportunity to position them within the premium and middle segments,” said Isaacs.
Improving integration between Encore, Spar’s suppliers, distribution centres and independent retail networks is expected to unlock efficiencies and support stronger margins across the system.
“We have a trusted brand, strong supplier relationships and a retail network that can benefit significantly from a more integrated private-label platform,” he added.
Isaacs said the focus would be on accelerating product innovation and improving the efficiency of the value chain.
“There are two key opportunities: accelerating product innovation and new product development, on the one hand, and simplifying the end-to-end value chain on the other,” he said.
Spar has 2,523 stores in Botswana, eSwatini, Lesotho, Mozambique, Namibia and SA, with 4,657 permanent employees and a turnover of R97.7bn.
Apart from groceries, Spar has a building material brand. Build IT, which contributes 8% to the revenue, and health businesses that contribute 2% to revenue.