Shoppers buying more as grocery prices fall, Boxer says, but food inflation could return

South Africans are buying more groceries at Boxer while paying lower prices, but the discount retailer has warned that food inflation could return after months of declining prices.

Boxer Retail’s interim results to August, released on Monday, show that selling prices fell 2.4% during the 26 weeks ended August 30, 2026, compared with national food and non-alcoholic beverage inflation of 2% over the same period.

Boxer also announced on Monday that CEO Marek Masojada, 61, will retire at the end of February 2027 after more than three decades with the retailer. Justin Galloway, who has been with Boxer for 14 years and currently heads its supply chain operations, has been appointed CEO-designate and will take over on 1 March.

Masojada, who joined Boxer in 1993 when it had just five stores and an annual turnover of R120 million, will remain with the company until November 2027 to support the transition.

Boxer's turnover increased 6.3% to R24.1 billion, slowing from the 10.9% growth recorded in the second half of its previous financial year. The retailer attributed the slowdown partly to fuel price increases from May and deeper selling-price deflation.

“We have seen some improvement in trading momentum in the four weeks since the end of the reporting period, which gives us confidence as we enter the second half of the year,” said Masojada.

Food price warning

While Boxer's prices continued falling, its latest figures suggest that the pace of those declines is slowing. In August, the retailer recorded selling-price deflation of 3.1%, compared with 2.1% in September.

This means prices were still declining, but not as quickly as before.

Boxer said the gradual increase in food inflation it had anticipated for the financial year had not yet materialised, although it still expects prices to rise later than originally forecast.

The company cautioned that uncertainty around food inflation, together with elevated oil and diesel prices, continued to affect its outlook. Its internal selling-price movements reflect its product mix and do not necessarily represent changes in the cost of an identical household grocery basket.

Masojada noted that Boxer “continues to see strong demand for the value we offer, but is mindful of the broader economic environment, elevated oil and diesel prices, and the uncertainty around food inflation”.

Discount retailer expands

The results coincide with Boxer reaching its 600-store milestone as it continues expanding its footprint. During the reporting period, the company opened 24 stores, comprising nine Boxer Superstores and 15 Boxer Liquor outlets.

By September 30, it had opened 32 stores for the financial year, against a full-year target of 60.

Boxer also reported continued market share gains, although its results do not establish whether customers are switching from competing retailers or increasing their purchases.

Despite falling selling prices and slower turnover growth, trading profit increased 8.1% to just over R1 billion, while profit before tax and capital items rose 10.6% to R774 million.

Extra income

The company attributed improved profitability partly to stronger margins, economies of scale and additional income from supplier services and retail advertising.

Masojada said trading momentum had improved in the four weeks following the reporting period.

"We continue to see strong demand for the value we offer, but are mindful of the broader economic environment, elevated oil and diesel prices, and the uncertainty around food inflation," he said.

Boxer expects improved turnover growth in the second half of its financial year, supported by new stores and stronger recent trading, but cautioned that the short-term outlook for food inflation remains uncertain.

The company's shares were down 2% in mid-morning trade.

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