Pick n Pay & Boxer CEOs unpack JSE listing and what the future holds
Pick 'n Pay CEO Sean Summers shares his strategy to rejuvenate Pick n Pay by fostering a supportive culture, reuniting skilled talent, and empowering its 92,000 employees. With a focus on vision, pride, and resilience, Summers and Boxer CEO Marek Masojada convey optimism for sustainable growth, success, and delivering value through Boxer amidst renewed shareholder confidence.
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Extended transcript of the interview ___STEADY_PAYWALL___
Alec Hogg (00:08.334)
New listings on the JSE have been few and far between. This year, though, we've had WeBuyCars, which has shot the lights out. The next one, coming on the 28th of November, just around the corner, is Boxer. And this is being touted as a "forever stock," according to retail analysts. That means it's a company where you buy the shares, put them in your portfolio, and don't worry—they'll deliver.
Alec Hogg (00:39.79)
Today, we're here to answer the big questions that Sean Summers, I think, has been considering over the past year and a bit since returning to Pick n Pay. Sean, in a recent interview, you mentioned that acquiring Boxer 22 years ago was the best deal you made at Pick n Pay. That was back in 2002. Who would have thought that Boxer's listing—and the funds Pick n Pay will raise from it while retaining control—would end up being the saviour of the business you've inherited? Am I overstating it?
Sean Summers (01:09.676)
Not at all, Alec. It was the reality we faced a year ago when we assessed the options before us. Personally, it was a bit sad because…
Sean Summers (01:38.558)
It's always been wonderful to have Boxer as this exceptional business quietly trading in the background, its light somewhat hidden from the market, so to speak. But it's extraordinary that it's Boxer that's managed to save the day for us and breathe life back into Pick n Pay.
Alec Hogg (01:59.542)
And Marek Masojada is the chief executive of Boxer. Marek, you've been working quietly in the background, as Sean mentioned. Now, you've been thrust into the spotlight of the investment community. Have you undergone any specific training for this new role?
Marek Masojada (02:19.377)
Morning, Alec. It's definitely been a bit of a baptism by fire since Sean broke the news to me late last year. I've had to make a few mental adjustments, as have the top team, as we move into a more public space. That said, the leadership team is very excited about the opportunities that listing could bring for Boxer. Emerging from under the radar, where we've been for the past 20 years, opens up possibilities—particularly in expanding the Boxer brand and fostering partnerships that align with our growth strategy.
Alec Hogg (03:15.566)
Sean, he doesn't sound like your typical retailer. Marek, you seem composed as we get into this interview. Sean, when you returned to Pick n Pay, you had three strong-performing divisions: Boxer, a fantastic business; Clothing, which you've said was and still is doing well; and the online business. Given that, wasn't there ever an option to sell off the rest of Pick n Pay and focus only on these high-performing divisions? Did that thought ever cross your mind?
Sean Summers (04:03.821)
Well, that assumes Pick n Pay has turned into a "weed," which I assure you it hasn't. There are still many pockets of excellence in this company. Just this morning, before we came live, I visited a store in Benoni, Oakfields, where Mario opened a new branch. I was there around 5:30 a.m., and the energy was incredible—staff singing and the atmosphere electric. There's so much good still within Pick n Pay.
The challenge was ensuring Pick n Pay could weather its current challenges and regain its footing. South African retail has seen its ups and downs—OK Bazaars, Checkers—all have faced cycles of decline and recovery. For Pick n Pay, the priority is not just the business itself but the 92,000 people connected to it: 31,000 at Boxer and another 60,000 across the broader business. Every night, we're feeding 300,000 mouths. The responsibility extends far beyond shareholders—it's about suppliers, landlords, communities, and families. Saving this organization is a monumental task.
Alec Hogg (05:51.426)
But why did you have to let Boxer go off on its own? For those unfamiliar with the backstory—the debt at Pick n Pay and the need for capital—can you explain what led to this decision and how you presented it to the board?
Sean Summers (06:17.509)
The situation was straightforward: we were asset-rich but cash-poor. Our balance sheet was completely misshapen. On one side, we had extraordinary assets like Boxer and the Clothing business. On the other side, we had Pick n Pay, burdened by significant liabilities due to decisions made—or not made—in the past.
We had to unemotionally assess the journey ahead, understand the past, and decide on a path forward. Boxer's listing is a calculated move to provide the oxygen needed to execute our business plan. By retaining a controlling stake, we remain part of Boxer's extraordinary future while securing Pick n Pay's recovery.
Sean Summers (08:41.644)
I told Marek last December that life was about to change. But in a way, it's poetic justice. Boxer has grown from fewer than 40 stores when we acquired it to an extraordinary business. It deserves its moment in the spotlight, and the team has earned it.
Alec Hogg (09:29.706)
Marek, you're very much a Boxer man rather than a Pick n Pay man, aren't you?
Marek Masojada (09:31.345)
Absolutely, Alec. I've been with Boxer for 31 years. I joined when we had just five stores and were nicknamed the "Zululand Cowboys." Back then, we were a small regional business with about 30 stores in KwaZulu-Natal and the Eastern Cape.
Every five years, the company evolves into something new. That's how I've stayed for 31 years—it's been like working at a new company every few years. From trading days in places like Pongola to where we are now, it's been an incredible adventure.
Alec Hogg (12:23.938)
Sean, I can see why Marek is your kind of guy. You're both long-time retailers. You joined Pick n Pay 50 years ago as a 20-year-old, didn't you?
Sean Summers (12:54.852)
Yes, 50 years ago. And I'll say this about Pat Goss, who Marek mentioned earlier—he was a tough negotiator when we acquired Boxer. But I have no regrets. Looking at what Marek, Hugh, and the team have built fills me with immense pride. Boxer is an extraordinary business, and the people behind it deserve all the credit for its success.
Alec Hogg (13:40.29)
But how was it possible that you didn't get contaminated, Marek? And I'd love to get Sean's thoughts on this too, by the decline that was happening in Pick n Pay.
Marek Masojada (13:52.855)
Right back in 2002, when Pat, Sean, and the two leadership teams were discussing the deal, there was a promise made by Sean at that time that Boxer would be left as its own business, retaining the culture that had been instilled in us from those early days. That promise was absolutely followed through by the various CEOs at Pick n Pay over time.
Marek Masojada (14:22.545)
Sometimes we've had to fight quite hard to retain our independence and our culture. Ultimately, the results of the business and the growth we showed spoke for themselves. That won the day. There were conversations about joining the businesses at various points, whether in IT or acquiring at the tills, etc. But we unashamedly take the advantages where we can and remain independent where it suits us. Credit to each CEO at Pick n Pay for allowing that to happen.
Alec Hogg (15:10.114)
You've had a lot of them since Sean.
Marek Masojada (15:15.121)
Yes, absolutely. We've learned from each one. All I can say is that Pick n Pay has been our biggest supporter and encourager over that time.
Alec Hogg (15:30.67)
I see, Sean. He's been well-trained. He's going straight into this media story now—got all the answers. But that sounds, and I get it, like first-level, no problem. But Sean, when you're the CEO of the group and you've got a wholly owned subsidiary and you want things to happen… Yeah, we decided in 2002 that you guys would be independent, but actually, I want you to do XYZ. How did they manage to stay away from that?
Sean Summers (16:04.83)
It's very simple, Alec. Raymond always emphasized, from my youngest days in the company, the principle of decentralization. It's about thinking globally but acting locally—you actually need to think locally and act locally. One of the things that sadly contributed to the decline of Pick n Pay was breaking down one of Raymond's fundamental founding principles in the business.
Boxer had such a distinct culture of its own. They trade in a completely different way to how we trade as a company, philosophically. You just can't mix the drinks. It's like sending lion dancers to watch a ballet—it doesn't work like that. Rock and roll is rock and roll, and classic is classic. And these boys are rock and roll, that's for sure.
Alec Hogg (17:10.57)
Orlandos to lion dancers, Marek. I'm sure that isn't an analogy you'd like, but it shows there's something special about those companies, even though you've been part of Pick n Pay. The feedback we're getting is universally positive—you've done extraordinary things. You'll be asked this question a hundred times, but what's the secret sauce?
Marek Masojada (17:39.541)
There was a poignant moment in our history, about 10 or 11 years ago. Through Pick n Pay's leadership at the time, we were exposed to one of the Polish soft discounters, Biedronka. Boxer was emerging from being more of a rural, regional player and starting to spread its wings. We had entered other provinces and were facing solid competition in both traditional and new territories.
We went overseas to look at different formats, knowing our model at the time needed change. We spent quality time with Biedronka's leadership group, who generously allowed us into their business. When we returned to South Africa, we made significant changes. The big theme was simplicity.
Marek Masojada (19:05.413)
We instilled efficiency in our operations—supply chain, head office support services—making it hard for traditional retailers to compete. That efficiency allowed us to pass value back to the consumer. For example, we halved our range of products in stores from 7,500 to 3,000 SKUs, focusing on what mattered most to customers.
Marek Masojada (20:04.665)
That focus on efficiency and passing value to the consumer has been the cornerstone of our growth since then.
Alec Hogg (20:23.544)
SKUs?
Marek Masojada (20:25.617)
Stock keeping units.
Alec Hogg (20:31.054)
Ah, okay. If you're a manufacturer, given that you turn over nearly 40 billion rand annually through 489 stores, it can't be easy to ensure everything stays clean. How do you prevent a manufacturer from gaming your buyers?
Marek Masojada (20:59.409)
You have to be extremely disciplined with a narrow range. Every store is planogrammed, so there's only space for approved products. To bring in a new product, you have to remove one. Core products are consistent, but we experiment at the edges. Volume, product acceptance, and market preference drive those decisions.
Alec Hogg (21:52.418)
From the time you were acquired by Pick n Pay, your turnover grew from 800 million to 37 billion rand in real terms—a 14.5% annual compound growth rate. That's extraordinary. But your store count has grown at a similar rate. How many new stores can you still add in South Africa, given you already have 489?
Marek Masojada (22:55.729)
Growth is key, but the health of a business also comes from like-for-like growth, which we've consistently achieved above market levels. Of our now 500 stores, over 300 are supermarkets. We have a modest 4% market share in formal retail, so there's significant runway ahead. Being a smaller player with a smaller footprint gives us opportunities for long-term growth.
Alec Hogg (23:52.28)
Sean, who would Boxer's major competitors be, and how do you see Marek and his team competing for market share in the future?
Sean Summers (24:07.502)
Boxer's main competitor would be Shoprite's USave. Boxer fits between USave and Shoprite philosophically. With South Africa's demographic growth over the next 20-30 years, Boxer is perfectly positioned.
We recently began co-anchoring developments with Pick n Pay, like in Soshanguve, where Pick n Pay and Boxer will both operate in the same center. Pick n Pay remains the preferred brand in many high-density markets, but Boxer complements it perfectly, and both can thrive side by side.
Alec Hogg (25:53.472)
What are the differences between the two if they can co-exist in the same area?
Sean Summers (26:02.424)
Boxer is a limited assortment store with tight range control. Pick n Pay offers a broader assortment, focusing on leading national brands. Their approach to butchery, bakery, and service areas is also different.
One of my light bulb moments was during a visit to a mall with a Pick n Pay, Boxer, and Shoprite all under one roof. Pick n Pay was competing directly with Boxer, which made no sense strategically. Poor strategy, even if well-executed, remains poor. That was a significant issue we faced.
Alec Hogg (27:36.108)
It's not a point of view. It is a devil's advocate question. What happened in that shopping center where you had QualiSave, Boxer, and ShopRite? Who was winning the consumer's heart?
Sean Summers (27:51.44)
Our store was also trading quite well. I think Boxer and ShopRite were doing volumes ahead of us because people who came to Pick n Pay, even though they saw the major QualiSave with Pick n Pay branding, didn't find the range they expected in a Pick n Pay store. Our expense structure, by its nature, is somewhat higher than Boxer's as well. So you're operating in a lower-margin market with a slightly higher expense structure.
You don't have to be a mathematician to see that the equation is upside down. These are the challenges you're quietly dealing with in the background. As I've said before, one of the challenges we face is dialing out the noise. There is so much active interest in Pick n Pay at the moment—understandably so. People are asking, "What is happening? Can it survive?" We just have to keep our heads down. We know where our North Star is. We know the journey we're on.
We have adequate funding in place to achieve what we need to achieve, and that's the journey and mission we're focused on.
Alec Hogg (28:58.638)
And it seems like you're in the same place, Marek. There's a lot of noise around your listing as well. I've been told that 80% of a chief executive's role—maybe just in America—is dealing with investors. Hopefully, that won't be your experience. But how do you keep your team focused, ensuring they're not caught up in the day-to-day fluctuations of share prices and options?
Marek Masojada (29:35.461)
Absolutely. That's the new world we must adjust to. I'm very anxious to get past next week and get back into the stores. November and December are critical trading months for us. Next week is potentially the busiest trading week of the year, with Black Friday coming up. It's been set up well with payday falling on Monday.
That said, I have a very focused and operational team working in the trenches daily. To go back to the discussion about that shopping centre—it's a case study. For years, that centre was anchored by ShopRite and Pick n Pay. Boxer entered about two, two-and-a-half years ago, and it's been a massive success for the entire centre.
In my view, bringing Boxer in added another dimension, making the centre a destination point. Although we don't have access to competitors' figures, I wouldn't be surprised if their turnovers increased as a result. Certainly, the Pick n Pay store there has been on the up and is trading extremely well.
Alec Hogg (31:16.928)
What are you going to miss about being wholly owned by Pick n Pay?
Marek Masojada (31:22.651)
Life carries on for us, apart from the new public-facing aspect. Myself and David Wayne, our CFO, are now navigating the responsibilities that come with being a listed entity. However, we've been following a focused strategy for years, and the listing doesn't change that.
Our goal remains to extend our footprint and make Boxer a better, more efficient business. The South African grocery sector is incredibly competitive, and we're graded daily by turnover against budgets and the previous year's performance.
Alec Hogg (32:30.958)
But you never answered my question—what are you going to miss about not being a wholly owned subsidiary of Pick n Pay?
Marek Masojada (32:34.864)
Honestly, not much will change. Pick n Pay remains our biggest supporter. Sean and I go back 22 years. Having him back has added great value to our business. He taught us a lot about retailing, opened our eyes to the bigger picture, and Pick n Pay continues to support us.
Marek Masojada (33:04.433)
We've never been reliant on Pick n Pay for day-to-day operations. Structurally, little will change in how we manage the business. However, being a public company now brings us a new independent board of directors, with five independent non-executives and two representatives from Pick n Pay—Sean and James Formby.
Alec Hogg (34:27.618)
Why was James selected as chairman?
Marek Masojada (34:32.945)
James has been the lead independent at Pick n Pay for the past two years and brings a wealth of financial expertise. He adds a level of sophistication we might lack, as we're very operationally focused.
Sean Summers (35:22.091)
James's appointment ensures Boxer's independence as a listed entity while maintaining collaboration opportunities with Pick n Pay. Structurally, we've designed Boxer as a growth vehicle, retaining more cash in the business to fuel that growth.
Sean Summers (37:33.352)
Culturally, Boxer's focus remains operational. For example, with our JSE listing next week, while others plan large celebrations, Marek and his team opted for a simple cocktail event. By Thursday afternoon, they'll be back in stores, preparing for Black Friday. That speaks volumes about the company's priorities and culture.
Alec Hogg (37:33.352)
From Pick n Pay's perspective, could Boxer's success lead to a situation similar to Naspers and Tencent, where Boxer outpaces Pick n Pay, potentially creating a valuation gap?
Sean Summers (38:13.722)
When I returned last year, it became clear that listing Boxer was necessary. At that time, Pick n Pay, on its own, didn't look attractive. However, the reality is what it is. Transparency is freeing, and it simplifies matters.
Pick n Pay's market valuation currently reflects the challenges we're addressing. That said, there's growing optimism within Pick n Pay. It's about rebuilding the culture, restoring confidence, and re-establishing our position in the market.
The feedback I've received from suppliers is encouraging. Many have commented on the positive energy they see in Pick n Pay now—a clear indication that we're heading in the right direction.
Alec Hogg (41:54.454)
We're getting that feedback too. It's taken a while, though. It wasn't immediate, and I suppose that is to be understood. But from a value investor's perspective, you're looking at Pick n Pay now, you're saying, "Well, I'm buying Boxer at a discount, and I've got an option on Sean Summers actually fixing Pick n Pay." That's the way the market's looking at it. You're giving us confidence with the feedback that you're getting, Sean, but on a cultural level—and I think it's a good place to close.
Marek Masojada (42:02.385)
If we are to take that, we need to make sure we're doing it right. The importance of focus and execution cannot be overstated.
Alec Hogg (42:21.504)
You like to talk about people. You've mentioned many times that it's the 92,000 people who actually matter—the stuff on the shelves, not so much. Are you making changes in the business? You said to me at the Nightcap Business Conference that there are two types of people: those who give and those who take. I recall you saying that was a bit of a challenge when you returned to Pick n Pay. Are you managing to either turn the takers into givers or remove them?
Sean Summers (43:01.539)
There are a few who didn't share our vision and have left. I wish them well in finding a place that aligns with their vision. However, we've also brought back select individuals with critical skills—people who should never have left. Often, people leave because of other people, not the company itself.
When Wendy asked me how I planned to rebuild the team, I told her it's the same way we did it before: ordinary people achieving the extraordinary. If you create an environment of support, belief, and a shared vision, people rise to the occasion. Failure isn't feared—it's part of growth. We aim to fail fast, learn fast, and above all, have fun in the process. That sense of pride and positivity is steadily returning, and it's heartening to see.
Sean Summers (44:30.405)
People often ask me where I get my energy from. I can tell you—I haven't needed an afternoon nap yet! In fact, the other day, when presenting to one of our major shareholders, I joked that they'd forgotten to ask the key question: succession. I told them, "Focus on the first part of the word—success. We'll address the other part once we've achieved it."
Marek Masojada (44:31.377)
That's a great point, Sean.
Sean Summers (44:59.323)
The priority is ensuring the company is whole, sustainable, and moving forward. Succession will naturally follow once we've secured that foundation.
Alec Hogg (45:15.598)
Sean, I've got to ask you a personal question as we wrap up. You must know the story of Rose Blumkin from the Nebraska Furniture Mart. She was removed from the company in her 90s, only to open a competing store across the street. Eventually, her sons had to ask Warren Buffett to bring her back because she was outcompeting them. When you left Pick n Pay and saw its struggles, did you ever think about starting your own store?
Sean Summers (46:02.947)
No, Alec, and I'll tell you why. My heart wouldn't let me. There are too many people I love in this company, and the Ackerman family—Raymond, Wendy—are still such a key part of my life. I could never do that. If I had started something new, it would've been in another geography. Business driven by animosity or bad feelings never ends well, not for the soul or for the business itself.
Alec Hogg (46:41.9)
Marek, you're about to have many new shareholders. What's your message to them as we close this conversation?
Marek Masojada (46:53.332)
The interest shown in Boxer has been a huge compliment to the business. Over the last five or six months, I've met many new people in a world I didn't fully understand before. To those who are subscribing for shares: thank you for your confidence. Our team is fired up to deliver, and we're excited for the future.
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