Spar Switzerland is about to sell: What happens with 3,000 jobs?

Spar Switzerland is about to sell: What happens with 3,000 jobs?

The South African Spar Group has decided to sell its subsidiary Spar Switzerland, which could have far -reaching effects on the food industry in Switzerland. This applies to all 363 branches in the country and around 3,000 employees affected by this decision. Talks with potential buyers are currently in progress, whereby the ideal buyer should be a local partner who supports the growth strategy of Spar Switzerland, such as 5min.at and and Krone report.

The sale is not surprising, since the Spar Group has already initiated a strategic review from Spar Switzerland to overcome the economic challenges. The company's sales and profit have been declining for several years. In the financial year until the end of September 2024, sales dropped by 6 % to CHF 745 million, while profit fell by 17 %. These numbers illustrate the serious problems with which the brand has been faced with pandemic and show a loss of market shares, while consumers are increasingly looking for cheaper prices.

consequences for employees and customers

CEO Gary Alberts emphasized that continuity must be guaranteed for employees, suppliers and customers during the sales process. Furthermore, it is an important goal that the Spar brand remains in Switzerland. Negotiations with possible buyers are already in an advanced stage, but a final decision could still take weeks, according to Krone.

Spar Switzerland, which operates under the brands Spar, Eurospar, Spar Express, Maxi and Top CC, has also tried to strengthen its position in the market in the past few months. The use of own brands has increased in the range and its share of sales has increased from less than 5 % to almost 25 %. These products offer an average of 20 % cheaper prices than comparable branded products, which could be a decisive advantage in the current market situation, such as [Tagblatt] (https://www.tagblatt.ch/Stschweiz/lebensmittelhandel-Maufschwund-Markt-magere-mage-mere-par-schweiz-werd- and-am-ergar-Gar-Gar-Gar-Ld.2632677) adds.

challenges for SPAR and the industry

The challenges for Spar Switzerland are particularly due to the failed expansion strategy and the failures of previous managers. The new board of directors Mike Bosman has already announced legal steps against former managers. In connection with the business activity of SPAR, an ongoing procedure of the Competition Commission (WEKO) is also examined for possible inadmissible agreements. Here, punishments of up to CHF 60 million threaten, which also complicated the situation.

Overall, Spar Switzerland has come under pressure since the South African Spar Group was taken over in 2016 and, with a return of only 3.2 percent, fights to invested capital in the first half of the 2024 fiscal year. For comparison: SPAR South Africa has a return of 14.9 percent. The food retail market is therefore exciting, especially in a market that is dominated by large players such as Migros and Coop.