A first-half fist-bump for Boxer

The JSE’s newest retailer has delivered a maiden dividend and held profit margins steady in its first half to end-August. That’s just as well, says Opportune Investments’ Chris Logan, “as the market is pricing Boxer as a very high-quality growth story”.  

But Boxer, one of the rare JSE listings of the past 12 months, has mostly stuck to its promises: opening 25 new stores over the half, growing volumes ahead of inflation, and taking market share. Its turnover was 13.9% higher over the period, at R22.5bn, while trading profit rose 15.1%, given it a margin of 4.1%. 

Boxer, in fact, is the best performing food stock on the JSE in 2025.  

At R73, its shares have climbed more than 15% – which may not sound huge in light of the kind of numbers being racked up by gold miners, say, but consider that its former parent Pick n Pay is down 1.7% year to date, Woolies has lost 15.6%, mighty Shoprite is 2.4% lower and Spar would have cost you a packet, falling almost 28% since January. And to put it in context internationally, wholesale retailer Costco’s shares in the US are up only 2.2% over the same period, while Walmart has gained 13%.  

Boxer CEO Marek Masojada told analysts on Monday that it’s “difficult” to say where Boxer’s share of the market is coming from, but it probably includes the informal sector and “players in the lower-LSM segment”. That might well be Shoprite’s Usave division; in a later interview with Currency, Masojada says Boxer isn’t being cagey, but the only Nielsen data it sees – which tracks all the players – is its own. 

As for all the new stores Boxer is opening as part of a grand plan to double in size within seven years, Logan points to an “exceptional” performance of the company’s nine new superstores, with year-to-date turnover 36% above budget.   

“This strong performance … indicates Boxer is maintaining their ‘obsession’ with the quality of new store sites and that there is a substantial store rollout opportunity ahead which will hopefully be accomplished without Boxer diluting its very attractive returns on capital,” he tells Currency.  

Clearly, landlords are increasingly keen to have Boxer on board too. In the results presentation, Masojada said that “one of the positives of our listing has been exposure of Boxer into the minds of the property community; more and more they are approaching us with offers to come into these big centres”. 

Yet Standard Bank analysts are more circumspect. They pointed out in a note ahead of the numbers that the 25 stores opened in the first half mean Boxer will need to open 35-40 stores in the second to hit this year’s target of 60. “Each store not opened relative to expectations, could impact top-line growth by between five and 30 basis points annually,” warned the bank in its note to clients. 

This matters because store rollouts, as Standard sees it, “would underpin 60% of management’s aspirations to double revenue five years after IPO, highlighting the importance of keeping apace”.  

And there’s nothing easier about South Africa’s economic forecasts, the only real difference being that retailers are now seeing deflation in prices.  

“It’s harder to make money” explains Masojada. Retailers aren’t able to buy stock and make a bit of extra margin as prices rise. So it’s important to get shoppers to buy more in store with the extra cash they may have. But, he says, “we’ve seen basket growth on an individual customer level”.

“If the customer is saving, say, R10 on washing powder because the price is down, are they spending that turnover in another product in your store and that’s what you would hope, and we have seen unit growth. So there’s reason to be positive across the business.” 

No need for ‘razzmatazz’

The other development for Boxer is the introduction of its loyalty system. While it’s been running for 12 months now – and has 2.3-million people signed up – the retailer is distinctly behind the curve, given other retailers’ years-old rewards programmes (Clicks being the oldest). 

The way Masojada sees it, discounters should be offering the lowest price anyway, and don’t need “the gimmicks and all of that razzmatazz”. 

“Customers don’t want a Boxer card to get the best price so it’s a much harder sell for us to put a card in someone’s wallet, put it that way,” he says. “We’ve got to be able to offer something in terms of the rewards programme that doesn’t put us out of business by costing a fortune in margin because we don’t have the margin.” 

But the concession here is clearly having better data on its customers; after a long internal debate, the need to better know its shoppers’ habits clearly won out.  

Boxer says that the growth in take-up means that every month since launch, almost an additional 1% of turnover is attached to a card – so the company now knows increasingly who its shoppers are. From 15%, about a quarter of Boxer’s turnover is now linked to a card owner. 

The question is where to now? According to the company, trading has been in line with the second quarter of the half, which was stronger than the first. Much, as always, depends on Christmas and, before then, Black Friday.  

You get the impression that this is a team used to playing it down. Asked about the second-half prospects, Masojada told analysts that the “sheer size of the numbers” Boxer has to hit to meet its budgets makes it difficult to forecast “exactly how it’s going to work out”. But, he said, “momentum has continued and hopefully [it’s] setting up nicely for the rest of the year”.