Read the Conversation
Meeting highlights:
- Supporting Independents: SPAR empowers independent pharmacists with branding, marketing, retail proficiency, and wholesale advantages—no franchise fees, just a small marketing charge.
- Three Healthcare Pillars: Operations include branded pharmacies, a courier service delivering specialty meds, and a training academy certifying nearly 50% of pharmacist assistants in South Africa.
- Rural Access Focus: Many SPAR pharmacies in smaller towns include clinics, helping close gaps in primary healthcare availability.
- Wellness & OTC Growth: Rising demand for supplements and wellness products is fueling growth; SPAR aims to offer these responsibly under its trusted brand.
- Tech & Expansion Plans: Targeting to double pharmacy numbers in 3 years via conversions; exploring technology and digital tools that assist independent pharmacies to compete with large corporates, and vending machines.
EF: How do you view 2025 from your perspective?
AS: South Africa’s position in the world has faced many challenges, but at the same time, it has also been an opportunity that’s brought some positive developments for the country. There has been progress on several important issues, though it never feels like enough. As an emerging market with our history, there’s always more work to do and a lot to catch up on. Still, despite the difficulties, South Africans have shown their usual resilience. Overall, it has been a good year for SPAR.
EF: Could you elaborate on SPAR’s growth plans?
AS: We are unique in the Southern African market, especially in groceries, because unlike most companies, we are a listed wholesaler that supplies independent retailers. Our business model is strong across different sectors in the region. We operate in groceries under the main SPAR brand, have a liquor brand called Tops, a building materials brand called Build It, and pharmacies under SPAR Health. Within healthcare, we also run three separate businesses.
At the heart of what we do is helping independent retailers realize their potential. We believe strongly that by uniting them under one brand, we give them the strength to compete with big retail chains. Supporting entrepreneurs is a core principle for us. Looking forward, we are committed to strengthening what makes SPAR unique and extending our reach into more sectors where we can add value. Our growth strategy is to find new industries where independent players need the support of a powerful brand to compete with larger, listed companies—and that is where our focus will be.
EF: How important is health to the SPAR Group?
AS: Health is becoming increasingly important for our future, and we see it as a big growth opportunity. As I mentioned earlier, we strongly believe that independent operators should be able to compete with large corporates, and we provide a platform to support them. In South Africa, there are thousands of independent pharmacists running their own businesses, but many are under pressure as the pharmacy and health sectors become more corporatized. We are in a unique position to help these independent pharmacists stay competitive. We do this through the SPAR Health brand, including ‘Pharmacy at SPAR’.
Beyond that, we run a large specialized pharmacy business through our warehouse, where we deliver high-cost specialty medication directly to patients and their healthcare providers. This side of the business is growing rapidly, particularly patient support programmes aligned with the outcomes and objectives set by the major health insurance companies. It has become an important driver of growth for us. We also operate a training facility and academy for pharmacist assistants and related roles. In fact, nearly half of all pharmacy assistants in South Africa are certified through our program, which makes us a key contributor to skills development in the sector.
While our health and pharmacy division is still smaller than we would like, we see a big opportunity to scale it up in the coming years. We want to double the number of pharmacies under our banner, especially in smaller rural towns where access to primary healthcare is limited or unaffordable in the private sector. Many of these pharmacies also offer basic healthcare services through clinics, which is another area we are focusing on. We are giving consumers greater access to affordable healthcare, while also offering them a sense of dignity in how those services are delivered. That is something we are very proud of.
EF: What is the value proposition you offer to independent pharmacies, and why is it advantageous for them to be part of the SPAR Group?
AS: There are a few key things we do. Independent pharmacists face new challenges as large corporate retailers take over the pharmacy space. Competing effectively now requires skills in advertising, promotions, and brand building. Most independent pharmacists cannot manage these things on their own.
By using the SPAR name and logo, independent pharmacies gain strong brand recognition and credibility. More importantly, we support them with promotional campaigns, advertising, and brand-building resources that they would not be able to access alone. This allows them to compete directly with big chains. We do not monetize this by charging franchise or royalty fees. Instead, we only collect a small marketing fee, and our business model makes money through wholesale supply. By pooling resources, we help independent pharmacies compete with the big corporations’ buying power. Our wholesale division supplies them with 65%-75% of their goods, but we do not restrict them. They are free to buy products elsewhere if they can secure better prices.
We also provide them with access to modern retail expertise, including store design, layout advice, operational support, and performance reviews. Our retail operations managers provide business insights, benchmark performance, and share best practices to help pharmacies run more effectively. So, beyond just the SPAR brand and wholesale supply, we provide a comprehensive set of services that strengthen independent pharmacies and help them thrive in a competitive market.
EF: What consumer health trends have you observed, particularly since the pandemic, and how is SPAR adapting to them?
AS: In food retail, the move toward wellness is no longer new. It is quickly becoming a normal part of what people want. When this shift is supported by a well-known and trusted pharmacy brand like Pharmacy at SPAR, customers accept it much faster. Products like over-the-counter medicines, supplements, and other health-related items are growing really fast. We see a strong connection between what happens in the pharmacy and the supermarket, and that part of the business is getting bigger every day. People are starting to understand better how important food and nutrition are for their health, and this self-care trend will just keep growing.
At the same time, with this growth comes a lot of responsibility. There are many products in the wellness market making claims that are not backed up by facts, and that can mislead people. As a trusted brand, it is important to be careful and only promote products that are real and safe. We want to help customers make smart choices and offer them good options. So, while wellness is a great area for growth, it also means we have to be responsible and honest with our customers.
EF: How is SPAR integrating technology platforms to enhance pharmacy services and delivery, and are there any partnerships in this area?
AS: The rules need to catch up with the technology, especially when it comes to delivery and on-demand services. That said, there are some new things you can do, like testing in stores and using apps to make things easier. But the really big changes will come from how people’s digital health information is used. Imagine if a pharmacist could see everything in a patient’s health history, like doctor’s notes, all in one place. There is a lot of work going on to make that possible, and it could change healthcare for good.
We have also been working on better ways to digitally connect pharmacy customers & patients to their doctor, while the clinic nurse handles any physical exams needed. This could make healthcare more accessible, affordable, and convenient for many people - and is supported by the health insurance companies. There’s also stuff like vending machines in supermarkets that support self-care by offering non-scheduled medicines, which our pharmacy team is exploring. There is a lot happening behind the scenes in the pharmacy side of things, but I am not an expert on all of it. Our pharmacy people are better equipped to explain these innovations.
EF: How does SPAR plan to expand from 121 pharmacies to doubling that number within the next three years?
AS: What makes us different as a business is that we focus on helping independent operators. We give them the chance to compete with the big chains. In South Africa, there are thousands of independent pharmacies under a lot of pressure because corporate pharmacies are opening quickly. Our main goal is to work with these existing pharmacies around the country and help them compete. We are not really focused on opening many new pharmacies. Instead, we want to support and strengthen those that are already operating. That is where we see the biggest opportunity.
EF: What are you most excited about in the SPAR Group right now?
AS: What excites me most about SPAR Group is its future in Southern Africa. I will not go into all the details, but over the past two years, we have focused on selling some of our European operations. We recently completed the sale of our business in Switzerland, after selling our Polish operations last year. Now, our management team can fully concentrate on growing the business in Southern Africa. That is something I am really excited about. There is a real energy among our independent retailers right now, and I see great opportunities in South Africa. One exciting new development is that we are launching our first pet store concept this Thursday, which I am really looking forward to.
