New Spar boss Reeza Isaacs and his executive team have their work cut out to shore up investor confidence in the food retailer after flagging a possible 65% plunge in profit as logistics shortcomings in KwaZulu-Natal continue to plague the group.In a regulatory filing on Friday updating the market on its performance in the 26 weeks ended March, the group said HEPS would be 55%-65% lower than a year earlier. Spar is scheduled to publish its interim results on June 10.The trading update drew a sharp rebuke from the market, with the share price tanking almost 15% on the day. The group’s value has plunged nearly 50% since January as investors remain unconvinced about its turnaround efforts after the disastrous rollout of SAP’s enterprise resource planning software at its KwaZulu-Natal distribution centre a few years ago.(Dorothy Kgosi) The company said that operation’s first-half performance was weighed down by short-term strategies that prioritised top-line growth over profitability.“A root cause analysis also attributed the sharp decline experienced in the first quarter of the current financial year primarily to insufficient logistics capacity planning, which in turn disrupted service levels and resulted in increased costs,” the group said.“KwaZulu-Natal’s performance remains a key ongoing risk for the group and continues to be closely monitored at executive and board level. In response, corrective measures have been implemented, including key leadership changes. The gross profit margin improved towards the end of the current period, though it remains below targeted levels,” Spar said.“KwaZulu-Natal delivered three consecutive profitable months in February, March and April of 2026. While this is encouraging, further work is required to fully stabilise operations, and the province remains a key area of focus.”The group also revealed that it experienced a difficult Black Friday in November, despite sales growth.“While Black Friday 2025 delivered strong sales growth over the campaign period, it came at a meaningful cost to gross profit margin and drove elevated marketing and promotional costs in November 2025,” it said.“With the appointment of the new group chief marketing officer, corrective steps are under way to introduce a more disciplined and tightly controlled promotional investment model.”The group has been making various executive appointments since the appointment of Isaacs after the abrupt resignation of Angelo Swartz, 28 months into the role.The retail group, worth just less than R9bn on the JSE, appointed John Bradshaw as chief marketing officer and Jerome Jacobs took charge of the group’s grocery and liquor business. Megan Pydigadu was promoted to the role of CFO, a position held by Isaacs until his promotion.With the appointment of the new group chief marketing officer, corrective steps are under way to introduce a more disciplined and tightly controlled promotional investment model.— SparThe trading update indicates the retailer is forging ahead with initiatives to realign its cost base and improve operating leverage over time, particularly in its Southern Africa business.“Spar enters the second half of the 2026 financial year with a cleaner balance sheet and a more focused geographic footprint. The executive team has been refreshed with new appointments having been made, but recovery will take time and the macroeconomic backdrop remains demanding,” the statement reads.“The near-term priorities include addressing key retailer issues, improving the quality and consistency of earnings and continuing to build the foundation for sustainable recovery.”