Pick n Pay, a JSE-registered company, plans to open 200 new Boxer stores by 2026 as part of its plan to double the brand’s retail sales at a discount and gain 3% market share. The plan was unveiled on Tuesday by boxing doctor Marek Masoyada.

“We have identified the places we want to be, and our real estate teams are working hard to protect the premises,” says Masojada.

“We need to maintain market-leading similar sales growth in our existing store base, and our commercial marketing and store operations teams are passionate about continuously delivering exciting, innovative and destructive promotions to drive sales.”

To support this goal, PnP is expanding its supply chain by announcing that it has opened a distribution center in the Western Cape and plans to open another in Gauteng.

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Boxer, which already has 380 stores in SA and eSwatini, has been part of a stable PnP for 20 years and has grown significantly over that time.

Good time to find a property

Sasfin senior stock analyst Alec Abraham says news of Boxer’s aggressive expansion initially raised concerns that the retailer could spend too much time growing discounters, losing sight of its core market.

But Abraham says his concerns eased as soon as it became clear that the retailer was still planning to work on improving the shopping experience in its traditional core brand.

“I initially thought they were [already] struggling to keep market share in their traditional market, where Checkers is gaining market share if they’re going to focus so hard on Boxer – you know, as we saw with Massmart – they’re probably going to land with a bloody nose and lose focus on its traditional market, ”says Abraham Moneyweb.

He notes that despite reservations, this may be the best time for PnP to take on this Boxer expansion, given the state of the business environment after Covid-19 – especially in the real estate sector.

“I used to be very skeptical that they would get good sites for aggressive expansion, but due to property space violations, I think they were lucky and they probably have a better chance of finding good sites to expand their Boxer [stores]».

Project Red stores a new format

At the same time, Pick n pay has introduced a new store format in terms of what it calls “Project Red”. Although it is unclear whether the new format will have a different name, the Project Red format will meet the needs of customers floating between the discount brand Boxer and the traditional brand Pick n Pay.

Project Red stores are designed to serve customers who are looking for competitive prices and preferred market stocks, with a focus on supplying a wide range of fresh fruits and vegetables, bakery and meat products.

There will be 8,000 stores in this format – 10,000 less than in traditional Pick n Pay stores.

However, Abraham is not sure that retailers will be able to pull off this differentiated store format. “Many companies have tried this – Woolworths has tried this – to prepare a slightly different range of products for another area. I think it’s very difficult and I’m not sure, I don’t think it will be very successful. ”

However, he congratulates the seller for reducing the supply of goods to customers, saying it will help deliver value to customers and help the seller save costs.

“It’s more about focusing on the product range and trying to get more volume with less

to get an extra discount from their suppliers, ”he says.

“You see it everywhere – Dis-Chem is doing it, and Clicks has been doing it for years – really trying to focus on numbers

so they can get as many discounts as possible from fewer products and thus try to deliver a better price perception for their customers ”.

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