Cheaper groceries are good news at the till and a headache on the income statement, and discount grocer Boxer is living both sides of that at once. At its second annual general meeting on Tuesday, the retailer reported that sales growth had cooled even as it kept flinging open new stores.
Turnover for the 20 weeks to 19 July rose 7.2%, down from the 10.9% growth it booked in the second half of its 2026 financial year. Sales at stores open a year or more, the cleanest read on underlying demand, crept up just 2.2%. The culprit is falling prices rather than fewer shoppers: Boxer says it kept gaining market share even as prices across its basket slipped.
Blame the basket
The deflation is concentrated in the staples that fill a Boxer trolley. “The reported deflation is the consequence of continued deflation across key commodity categories, particularly maize meal, rice and flour, which all experienced double-digit deflation during the period,” the trading statement said. When the price of the goods you sell drops by double digits, revenue growth slows even if you are shifting the same volume, or more.
Building through the dip
Boxer’s answer is to keep building. It opened 19 new stores in the 20 weeks — six superstores and 13 liquor stores — and says it remains confident of hitting its target of 25 superstores and 35 liquor stores for the 2027 financial year. CEO Marek Masojada, who ran the meeting, said the group is sticking to the medium-term rollout plan it set out when it listed and still sees room to expand across South Africa. “Our infrastructure is in place to take on these stores,” he said, pointing to seven distribution centres with headroom for up to 200 more superstores.
The retailer, spun out of a struggling Pick n Pay in 2024, has grown into a market value of just over R33 billion — more than double the roughly R13 billion its former parent is now worth. The shares slipped about 4% on Tuesday morning after the AGM and the trading update landed.
Boxer expects the pace to pick up again in the second half of the year, betting that as price inflation returns and its new stores mature, the growth it lost to cheaper maize meal comes back.
