Boxer’s bold expansion drive pays off as discount retailer pushes deeper into SA market

Discount retailer Boxer is accelerating its expansion strategy with 50 new stores added over the past year and a growing focus on liquor outlets attached to supermarkets. In an interview with BizNews, Marek Masojada says the retailer remains confident in its low-cost model despite mounting pressure from rising energy costs and intensifying competition. With a new KZN distribution centre now online, strong cash generation and plans for 60 more stores, Boxer is betting big on value-conscious South African consumers..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Edited transcript of the interview.00:00:13 – 00:00:39Irakli Rekhviashvili:We’ve seen aggressive store expansion from Boxer, particularly with a strong push into beverages and liquor stores helping drive growth. Can you give viewers some context around how this liquor strategy fits into Boxer’s broader expansion plans?00:00:39 – 00:01:04Marek Masojada:Good morning, Ian. Thank you for having me on the show.This morning we released our full-year results for the 2026 financial year. During the year, 50 new outlets joined the Boxer estate, and yes, there’s definitely been a strong leaning toward liquor stores.00:01:04 – 00:01:34Marek Masojada:We entered the liquor retail market relatively late, and currently about 55% of our supermarkets have an adjoining liquor store. That creates a significant opportunity for growth. During the year, we increased that percentage to 61%.The strategy is ultimately to have a liquor store attached to each of our main supermarket formats. That represents a major opportunity for expansion within the business.00:01:35 – 00:02:01Irakli Rekhviashvili:How does that liquor strategy fit into the current economic environment? Retail consumers are extremely price sensitive right now, and Boxer has managed to push efficiency gains back into pricing through what you describe as a “virtuous circle” of reinvestment.00:02:01 – 00:02:25Marek Masojada:We’re focused on growing the business and becoming a bigger player in South African retail. We operate across three key formats: supermarkets, liquor stores and Boxer Build.We’re expanding across all three areas.00:02:25 – 00:02:48Marek Masojada:Liquor stores offer a quicker opportunity to add outlets, while also creating a more convenient shopping experience for customers. Consumers can buy groceries and liquor in one trip.It’s a complementary strategy that’s very common in retail.00:02:48 – 00:02:56Irakli Rekhviashvili:Do you believe this liquor strategy will continue to work in what could be a difficult inflationary environment over the next six to eight months?00:02:56 – 00:03:20Marek Masojada:Yes. It’s a core part of our business and a complementary model. We are facing a challenging trading environment, particularly with higher energy costs likely flowing through into the market over the next few months.But we remain very confident in our value offering for consumers.00:03:20 – 00:03:31Marek Masojada:We’ll continue focusing on delivering value to customers despite those pressures.00:03:31 – 00:04:08Irakli Rekhviashvili:In your presentation, you mentioned the opening of the new distribution centre in KwaZulu-Natal. You also warned that the additional capacity could temporarily affect supply-chain efficiency in the second half of the year.Can you explain how Boxer is positioning itself around that challenge, especially given your focus on efficiency gains?00:04:08 – 00:04:51Marek Masojada:We were very excited to open the new distribution centre late last year in September. Whenever you create new capacity, there’s normally an expectation that additional costs will hit the income statement.But the strong message from our results today is that we managed to avoid that. Efficiency gains across our other six distribution centres allowed us to absorb the new facility without negatively impacting gross margins.00:04:51 – 00:05:25Marek Masojada:The new facility can eventually service around 200 supermarkets. As we rebalance our store base across seven distribution centres nationally, we’ve created additional capacity around the country for future growth.That obviously requires careful management, but we believe we’re over the difficult part now.00:05:25 – 00:05:32Marek Masojada:Every new store we add going forward should improve overall efficiency.00:05:46 – 00:06:11Irakli Rekhviashvili:Walmart has been expanding aggressively with advertising campaigns in Johannesburg and appears to be pushing for more market share.How is Boxer positioning itself against these new entrants, and where do you see your competitive advantage?00:06:11 – 00:06:42Marek Masojada:Walmart has been in South Africa for many years, and we’ve competed against some of their formats for a long time.The newer Walmart-branded initiatives don’t directly overlap with Boxer right now because our model is more focused on a tighter-range, discount-value offering for consumers.00:06:42 – 00:07:15Marek Masojada:That said, we monitor all new retail entrants carefully. We learn from different formats in the market, and they do influence our thinking.But we remain absolutely confident that our discount structure and operating model give us a strong competitive advantage and allow us to continue offering great value to customers.00:07:15 – 00:07:36Irakli Rekhviashvili:Consumers are under pressure in this inflationary environment. Your margins have remained steady, and you’ve reinvested efficiency gains into pricing.But based on your data, are you seeing signs of strain among consumers?00:07:36 – 00:08:03Marek Masojada:It’s important to remember that over the last 12 months we’ve actually seen deflation in selling prices, and that’s continued into the first two months of the new financial year.So at the moment, we’re still operating in a deflationary environment.00:08:03 – 00:08:39Marek Masojada:The concern is what happens going forward, especially with rising energy costs and the effect that could have on pricing later this year.We’ll do everything possible to manage costs elsewhere in the business before increasing prices. That includes improving efficiencies, cutting costs and exploring other income levers.Our value proposition to customers will guide every pricing decision we make.00:08:39 – 00:08:54Irakli Rekhviashvili:Boxer now has R1.1 billion in net cash, which is a major swing from the previous year. Does that position the business strongly for the year ahead?00:08:54 – 00:09:18Marek Masojada:We’re very pleased with the cash generation over the past year. One of our goals was to extinguish the R850 million debt taken on during the listing process, and we’ve now fully paid that off.00:09:18 – 00:09:41Marek Masojada:The question now becomes how much cash the business actually requires going forward. That’s a high-quality problem to have.We’re continuously looking at ways to reinvest into the business and expand further, while the board will also consider any implications for future dividends.00:09:41 – 00:09:59Irakli Rekhviashvili:If we sit here again a year from now, what would success look like for Boxer?00:09:59 – 00:10:44Marek Masojada:We’ve got several strong strategies in play that we hope to bring fully to market this year. One exciting development is B Media, which was launched last night on eTV through the Nyama Challenge campaign we’re running with ten suppliers.The campaign will run over the next three months and is aimed at elevating the Boxer brand and the brands of our partners.00:10:44 – 00:11:10Marek Masojada:We also want to successfully open the 60 stores we mentioned earlier and ensure they make a solid contribution to overall turnover growth.Those are some of the major goals we’d like to tick off over the next year.00:11:10 – 00:11:20Irakli Rekhviashvili:Despite the growth in stores, a few were closed. What drove those closures?00:11:20 – 00:12:00Marek Masojada:We currently operate 576 outlets across the group, and sometimes localised macro factors impact individual stores.In some cases, we closed stores because we opened bigger and better stores nearby and consolidated the business into the new location.But we remain fully confident in the model and in our future growth projections.00:12:00 – 00:12:05Irakli Rekhviashvili:Thank you, Marek. This is Irakli for BizNews.Marek Masojada:Thank you, Irakli.

Boxer’s bold expansion drive pays off as discount retailer pushes deeper into SA market

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