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Boxer Retail shares dropped by 3.3% on Tuesday morning after the retail company announced that its trading margin is likely to remain unchanged for the 20 weeks ending July 19, due to lower prices on customer basket goods.

Operations and Performance Indicators

The subsidiary Pick n Pay, whose shares are listed on the JSE, reported in a trading announcement on Tuesday that the company is operating in an environment of 'slowing momentum in a highly constrained trading environment.' The recorded deflation resulted from price reductions in key product categories, specifically maize meal, rice, and flour, which showed double-digit price declines during the reporting period.

On Tuesday morning, the share price was R73.18, which is 4.8% higher than R69.89 a year ago. Sales volume for this period increased by 7.2%, while the growth adjusted for internal changes was 2.2%. This figure reflects a slowdown compared to the sales volume growth of 10.9% (with 3.7% adjusted for internal changes) recorded in the second half of the 2026 financial year.

Marginability and Network Expansion

The sales volume growth adjusted for internal changes remained positive, sustaining the trend of the last three years. Boxer's market share increased during the reporting period, according to the company's calculations based on data provided by the global consumer analytics company NielsenIQ. Boxer aims to offer the lowest prices in the basket compared to competitors, using a carefully selected assortment of 3000 staple foods and necessities, including leading market brands and exclusive Boxer labels.

Internal price inflation, measured at constant volume, was -1.9%, representing a further slowdown compared to the figures of -0.7% and -1.6% previously reported for the first half of 2026 and the second half of 2026, respectively. Directors stated that thanks to strong growth in other trading income and strict margin control, current management estimates suggest that Boxer will maintain its profit margin in the first half of 2027 at the same level as in the first half of 2026.

Expansion Plans and Partnerships

During the reporting period, 19 new stores were opened, of which 6 were Supermarkets and 13 were liquor stores. The group has opened an average of 50 stores over the last three years. Directors noted that Boxer has a strong store opening plan for 2027, and management is confident that the group will achieve its previously stated network expansion target for 2027—opening 25 Supermarkets and 35 liquor stores.

The company expects accelerated sales volume growth in the second half of 2027, linked to anticipated price inflation and improved contribution from new stores, as most openings in 2027 are planned for the second half of the financial year. Furthermore, on July 1, Boxer and FNB eBucks announced plans to expand access to the 99-cent bread discount, one of the country's most practical savings initiatives. From July 1, FNB Easy, Aspire, and Prime Life customers purchasing at Boxer can benefit from this discount for up to four loaves of bread per month. Since the launch of the 99-cent initiative in September 2024 jointly with Pick n Pay, FNB has achieved significant success, distributing over 6.3 million loaves and providing customers with direct savings exceeding R9.6 million.