PnP: Aggressive boxer expansion and new store layout for ‘inbetweeners’

JSE-listed retailer Pick n Pay plans to open 200 new Boxer stores by 2026 as part of plans to double retail brand sales and gain 3% market share. Boxer MD Marek Masozada unveiled the plan on Tuesday.

“We have identified the locations we want to be in and our property teams are working hard to secure the premises,” Masozada said.

“We need to maintain sales growth as our market leader in our existing store base, and our commercial marketing and store operations teams are passionate about delivering exciting, innovative and disruptive promotions to drive sales.”

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

Read: Pick up grocery delivery on demand with Takealot agreement

Boxer, which already has 380 stores on SA and eSwatini, has been part of the PnP stable for 20 years and has grown significantly during that time.

A good time to look for property

Alec Abraham, senior equity analyst at Sasfin, said news of the aggressive boxer expansion initially raised concerns that the retailer could spend too much time growing discounts, losing sight of its core market.

But Abraham says his concerns have lessened as it becomes clear that the retailer is still planning to work on improving the customer’s shopping experience in its traditional core brand.

“It simply came to our notice then [already] Struggling to hold market share in their traditional market where checkers are gaining market share, if they are going to focus too much on boxers – you know, as we have seen with Massmart – they are probably going to land with a bloody nose and their traditional market. Focus on that, ”Abraham told Manioweb.

He noted that despite his reservations, this could be the best time for PnP to expand this boxer, given the state of the business environment after Covid-19, especially in terms of the property sector.

“I used to be very skeptical that they would find good sites to aggressively expand, but with the space constraints of property, I think they are lucky and they probably have a better chance of finding beautiful sites to expand their boxers. [stores]”

New format project Red Store

At the same time, Pick n pay has unveiled a new store format called “Project Red”. Although it is not yet clear whether the new format will go by a different name, the project will meet customer demand floating between the Red format discount boxer brand and the traditional Pick n Pay brand.

Project Red Store aims to serve customers looking for competitive pricing and market-beat promotions, with a focus on delivering a wide range of fresh fruits and vegetables, bakery and meat products.

There will be 8,000 products in this store format – 10,000 less than what is available in the traditional Pick n Pay store.

However, Abraham is not confident that the retailer will manage to close this isolated store layout. “A lot of companies have tried – Woolworths tried – to create a slightly different range of products for a different neighborhood. I think it’s very difficult and I’m not sure about that, I don’t think it will be particularly successful.

But he praised the retailer for reducing product offers for customers, saying it would help deliver value to the customer and help the retailer save costs.

“It’s more about focusing on the product range and trying to get the least out of it.”

To get additional discounts from their suppliers, “he said.

“You can see it across the board – Dis-Cam has been doing it and clicks for years – really trying to focus on numbers.

So they can get a lot more discounts from lesser products and thus try to give their customers a better value perception. ”

Leave a Reply

Your email address will not be published.