Today’s edition
Price Fighter
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Good morning, and welcome to your Tuesday Roundup. Boxer has been cutting its prices and still making more money, and it's just named the new captain of its ship. Meanwhile, tensions between businesses and the Presidency are growing, and a JSE-listed Bitcoin company has lost most of its board. Let’s get into it.
MARKETS
SECONDS OUT
Cheaper groceries usually mean thinner profits, but Boxer just made R565 million selling them
Cutting prices might help a supermarket sell more groceries, but can it actually make the business more profitable? Boxer appears to have found a way. Over the 6 months to August, food prices nationally increased by around 2%, while the discount retailer’s own selling prices fell by 2.4%. Yet its latest financial results show headline earnings increased by 9.1%.
The catch is that Boxer’s running costs grew faster than its sales, so cheaper prices alone could not have done it.
Where the profit came from:
- Fuller trolleys. Existing stores sold an estimated 3.8% more by volume.
- More kept per sale. A better product mix and the savings of buying and moving goods at scale more than paid for the price cuts and dearer diesel.
- Brands paying in. Advertising and shopper data, along with other services, lifted that income by more than a third.
Now, the man who runs that scale is about to run the whole business. On Monday Boxer named Justin Galloway, the supply chain chief who built its delivery network, to take over from Marek Masojada, who joined in 1993 when Boxer had five stores. It now has 600 and wants 60 more this financial year. Galloway starts on 1 March 2027.
ON THE LIST
Exporters are waiting to hear if South Africa keeps its US trade perks, and so are their workers
South Africa’s falling-out with Washington has been loud all year, but the part business worries about most is quieter. AGOA is an American trade programme that lets qualifying African countries sell thousands of products into the US with lower import duties. It has just been extended to December 2028, but the US is now deciding which countries make the cut for next year, and South Africa is not guaranteed a place.
A lot hangs on that list. The research arm of the trade union Solidarity, which has lobbied Washington on AGOA for four years, estimates that exports to the US support about 576,000 South African jobs. Roughly half are in industries that lean directly on AGOA - fruit, mining and cars among them - and their goods get dearer for American buyers if the better terms go.
The worry has spilled into business’s partnership with government, too. Neal Froneman, the former Sibanye-Stillwater boss, argued that the US should go after the individuals behind South Africa’s policies and leave business alone. The Presidency criticised the remarks and said it expected him to leave the partnership. On Monday he said they may have given the wrong impression, but did not take them back.
BAGEL BITE
Which metal has the highest melting point?
A. Tungsten
B. Iron
C. Gold
DOING THE ROUNDS
Postbank, the state-owned bank responsible for processing social grants, has reported a R5.2 million loss. It blames a R44.5 million interest bill from SARS, but there’s more to the story. Its income from banking fees has more than halved, largely because Reserve Bank restrictions prevent it from issuing cards to existing customers or signing up new ones. And while Postbank claims it would have been profitable without the SARS bill, even that result relied on money recovered from Land Bank. Without those repayments, the bank would still have made a loss. Full story →
Things are getting messy at JSE-listed Africa Bitcoin Corporation, where 4 of its 6 directors have resigned. It started when shareholders controlling around 76% of the company demanded 2 new directors, but the board refused to support them. The shareholders then pushed to remove 4 existing directors, who resigned before they could be voted out. Behind the dispute is founder Warren Wheatley, who recently stepped down as CEO after being banned from the financial industry for 20 years. He’s challenging that decision. Interim CEO Stafford Masie is also stepping down. Full story →
Apple is making another attempt to crack the smart home market, with a product launch in New York today. The company has kept the details under wraps, but Bloomberg reports that the main attraction will be a device called HomeView. Think of it as a screen you can put on your kitchen counter or mount on a wall to control things like lights and other connected devices around your house. It’s reportedly arriving in November, although Apple has yet to confirm any of these details.
WEATHER
BAGEL GAMES
Have you got what it takes to win today’s Wordle? Play here →
THE ANSWER
As for the Bagel Bite, the answer is: A. Tungsten
This extreme resistance to heat is why tungsten is used in the filaments of old-style light bulbs and in cutting tools that get very hot. Its name comes from Swedish words meaning heavy stone, and it is indeed very dense. Few substances on Earth can stay solid at the temperatures tungsten withstands. This makes it invaluable for high-heat industrial and scientific uses.
That’s your Tuesday sorted. Enjoyed it? Forward it on, a friend can subscribe in a click. Written by the Business Bagel crew.