Get Pick n Pay for free 

Investors buying shares in Pick n Pay are effective getting the retailer for free as its market capitalisation is significantly below the value of its 65.5% stake in Boxer. 

Apart from getting Pick n Pay effectively for free, there is nearly R10 billion left over as investors continue to reward Boxer for its strong growth while its parent languishes amid its turnaround. 

Boxer is now valued at just over R40 billion on the JSE, making Pick n Pay’s 65.5% stake worth R26.2 billion. Pick n Pay has a market capitalisation of R16.55 billion. 

The gap in value between Pick n Pay’s market capitalisation and its stake in Boxer has widened further in recent months as the discount retailer goes from strength to strength. 

On 11 May, Boxer revealed a strong performance for its 2026 financial year, with its revenue growing by 9.63% to R47.14 billion. 

Crucially, the discount retailer’s margins appear to be improving, with its profit rising by 12.51% year-on-year to R1.56 billion. Its gross profit margin of 21.6% is still below that of its peers. 

Boxer is on the front foot, with it taking the fight to Shoprite’s Usave with 52 stores opening across the country in the past financial year. 

This stands in stark contrast to the fortunes of its parent company, Pick n Pay, which is undergoing a painful turnaround. 

The company’s share price has plunged by over 50% in the past five years in the aftermath of the failed Ekuseni strategy, which CEO Sean Summers is working to clean up. 

Pick n Pay has reported successive losses under Summers and even briefly dipped into technical insolvency in its 2024 financial year. 

In its latest trading update for the 48-week period to 1 February 2026, Pick n Pay warned shareholders that it would report a wider headline loss for the current financial year. 

“The headline loss per share (HEPS) for FY26 is expected to increase by more than 20% when compared with the headline loss per share reported for FY25,” it said.

This is on the back of declining turnover from Pick n Pay South Africa amid the closure and conversion of several underperforming supermarkets. 

Pick n Pay South Africa’s like-for-like sales grew 2.9%, with company-owned supermarkets at 3.5%. The company will release its full financial results on 25 May 2026. 

The retailer is also currently consulting with trade unions to overhaul the structure of its workforce, which Summers has described as above market norms and out of line with shopping trends. 

This includes aspects of Pick n Pay’s current labour arrangements, such as minimum guaranteed hours, inflexible scheduling, and certain benefits and allowances. 

“The proposed adjustments are needed to bring the retailer’s labour practices more into line with its competitors to compete on an even footing,” Summers said.

“With more customers shopping later in the day and on weekends, a more adaptable staffing approach is required.”

To invest or not to invest

Investors are divided on whether getting Pick n Pay for free makes the company a good investment as its future prospects remain cloudy. 

While the retailer is undergoing a significant turnaround, some investors are preferring to wait for tangible signs of progress before investing in Pick n Pay shares. 

However, others believe that the opportunity to get Pick n Pay effectively for free with R10 billion left over is too good of an opportunity to pass on. 

One of these investors is Ninety One’s Value Fund portfolio manager John Biccard, who has made his name in the South African investment space by buying out-of-favour, undervalued stocks. 

In explaining the Value Fund, Biccard notes that these stocks may lag the rest of the market for long periods. His track record shows this tends to translate into outperformance over the long run. 

Biccard’s fund has allocated 4.9% of its assets under management to Pick n Pay, making it the sixth biggest holding in the fund. 

The fund manager has briefly explained why he is investing in Pick n Pay, with it simply being too good of an opportunity to miss in the current environment. 

“When the market pays you to take away an asset (in this case a large asset at a substantial negative valuation), you take it with both hands,” Biccard said in a social media post. 

Biccard did note that he doesn’t know what the catalyst for the value unlock would be, saying investors would be too late if they waited until it arrives. 

Not all investors think the same way as Biccard, with some saying that they will not buy the stock until there is evidence of Summers’ turnaround strategy taking hold. 

Benguela Global Fund Managers’s Grant Nader said that he would be very cautious in investing in Pick n Pay, with the only benefit being the cheaper exposure to Boxer than buying its shares directly. 

“You come in with a whole lot of problems that you can see with the labour issue. They are trying to resolve their structurally high cost base, that is not going to go well for them if they have a strike or walkout,” Nader told BusinessDay TV. 

“I would not be a buyer until there was evidence that this turnaround strategy starting to take hold. It is not for me.” 

PSG Hole in One Ruimsig’s Ricus Reeders agreed with Nader, but said there is some short-term bounce in Pick n Pay that traders can benefit from.

“I think there is a trading opportunity to the upside, but it is not an investment for the long run. Maybe you make 10% or 15% and get out. It is not something I would consider investing in,” Reeders said.