Pick n Pay will use the learnings from the Boxer model to reposition its Pick n Pay Value supermarkets as an aspirational but affordable store for middle and lower-income customers, the group said yesterday as it delivered financial results for the half-year ended August 2021. Picture: Nqobile Mbonambi/African News Agency(ANA)
Pick n Pay will use the learnings from the Boxer model to reposition its Pick n Pay Value supermarkets as an aspirational but affordable store for middle and lower-income customers, the group said yesterday as it delivered financial results for the half-year ended August 2021. Picture: Nqobile Mbonambi/African News Agency(ANA)

Retailer eyes Boxer model as it targets middle and lower-income customers

By Dineo Faku Time of article published Oct 21, 2021

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PICK N PAY will use the learnings from the Boxer model to reposition its Pick n Pay Value supermarkets as an aspirational but affordable store for middle and lower-income customers, the group said yesterday as it delivered financial results for the half-year ended August 2021.

Chief executive Pieter Boone said Boxer was the fastest-growing grocery retailer in South Africa and was gaining market share, particularly in its own brand products.

Boone said Boxer provided the group with a highly effective discount format – with lean and efficient store and supply chain operations delivering low prices and great value for customers.

He said Boxer increased its share in a number of key commodity categories – including bread, maize and oil – over the period, growing its own brand offer by 26 percent year-on-year, reaching a sales penetration of 28 percent in participating categories.

“The group is improving the layout of Pick n Pay Value stores, streamlining the operating model, and reducing the size of the range by up to 40 percent.

“A simplified customer offer has provided a good platform for more effective marketing, with deeper promotions, higher on-shelf availability, and less waste,” said Boone.

He said the group’s segmentation of its store portfolio had also enabled it to differentiate the offer for more affluent customers in its Select stores.

He said the group modernised 24 Pick n Pay Select stores in the period, optimising their core food and grocery range, and introducing 300 new lines – with a focus on high-quality fresh produce, added convenience, plant-based meal solutions and unique grocery lines.

“All 24 Select stores have delivered stronger sales and earnings, and are performing well ahead of the rest of the Select estate.

“The Select plan will be rolled out across a further 16 stores in the second half of the year,” he said.

The group said Boxer would begin to construct its second distribution centre in Gauteng in the second half of this year. The distribution centre would add 25 000 square metres of capacity, and service more than 100 stores. It will open in the 2023 financial year, and will be an important driver of Boxer’s accelerated growth strategy

Meanwhile, the group said its new and improved on-demand grocery service asap! had delivered growth rates of more than 200 percent year-on-year since its relaunch at the end of July, with a significant increase in new and returning customers, the group said yesterday.

Pick n Pay rebranded its on-demand grocery service app Bottles to become asap!

Chief strategy and restructuring officer David North said the online channel was appealing to the growing demand for online shopping.

“This is an exciting growing market for online deliveries within a short space of time. In some parts of the world around 10 percent of grocery shopping is done online. It is much less than that in South Africa and we are seeing room for it to grow,” North said.

He said customers had benefited from an improved user experience, simpler navigation, and a streamlined ordering and checkout process.

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