South African discount retailer Boxer celebrated a triumphant debut on the JSE on Thursday with an Initial Public Offering (IPO) valued at R8.5 billion. This move positions the former Pick n Pay subsidiary for significant growth in a rapidly expanding market.
This is the first listing of a soft discount retailer in South Africa and one of the most anticipated listings in nearly a decade.
With a 47-year history, Boxer with its roots in KwaZulu-Natal, with just 35 stores and a turnover of R800 million at the time Pick n Pay acquired it in 2002, has grown from a modest 35 stores to over 500 across South Africa and Eswatini. The company now boasts an annual turnover of R37.4bn and a trading profit of R2.1bn for the 2024 fiscal year.
Boxer’s CEO, Marek Masojada, said, “Our deep understanding of our customers and their needs has been the foundation of our highly efficient operating model, which prioritises the investment of cost savings and operational efficiencies into lower prices and deeper value for customers.”
He said the value retail sector has the largest number of customers and is the fastest-growing segment, despite limited spending power.
The South African grocery retail market is valued at R1.1 trillion. Global strategy research firm Futureworld estimates an untapped market potential of R105.5 billion in grocery spend in Boxer's customer target market in locations without a Boxer presence.
Besides its core supermarket division, Boxer also operates Boxer Build and Boxer Liquors, diversifying its offerings to meet consumer needs.
The IPO, spearheaded by Pick n Pay CEO Sean Summers as part of a larger recapitalisation strategy, was priced at R54 per share—the top end of the guide range—and was multiple times oversubscribed. The first trade of the day was at R63.01 a share - a signal of high investor interest.
Pick n Pay retains a controlling stake of over 60% in Boxer.
This marks the second step in Pick n Pay's turnaround plan. The first, a R4bn rights offer in August 2024, was also oversubscribed, signalling strong investor confidence.
Masojada revealed the surprise element behind the listing. “When Sean met me in November last year, he said, ‘Mark, this is what we need to do.’” He explained that some of the early shareholders in Boxer around 30-years ago had this dream that one day Boxer would be listed. On Monday that dream became reality.
Boxer holds approximately 68% of the discount grocery retail market, competing against established players such as Shoprite and Usave. It offers a broader product selection, fresh produce counters, and in-store services like financial offerings.
Masojada said Boxer would only expand in South Africa, but the hardest part was finding the right store spaces. There were no plans to expand in Africa.
Looking ahead, Boxer plans to capitalise on its market position by adding 65 new stores by the end of 2025, with continued expansion in South Africa planned thereafter. This growth strategy is fuelled by the increasing demand for grocery bargains in South Africa, where food prices have surged by 50% since 2020.
Mervyn Abrahams, the programme coordinator of the PMBEJD, said Boxer is well positioned to assist in the affordability crisis as they are selling to the lowest income groups in South Africa. If Boxer can bring down prices through scale that will assist in the household food insecurity we are seeing across the country.
“It is incumbent on the corporate sector to look for ways in which they can lower prices, particularly prices of core essential food items for low-income households, such as maize meal, potatoes and onions, cooking oil, chicken and some of the vegetables. Households need to have a proper meal. If prices come down households can buy more fruit, which contributes to nutrition” he said.
Abrahams said, in the long-term, while the retail sector can bring down prices, the whole food industry needs to be looked at. It is one thing to have lower prices at retail end, but the lower prices are driven by lower wages within the whole food sector and that in itself contributes to inequality in the country.“
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