South Africa's Dis-Chem sales rise on preventative healthcare demand

Shoppers queue outside a South African drugstore chain Dis-Chem Pharmacies ahead of a nationwide lockdown for 21 days to try to contain the coronavirus disease (Covid-19) outbreak, in Johannesburg, South Africa, 26 March 2020. Reuters/Siphiwe Sibeko

Group revenue rose to 11.6 billion rand ($788 million) in the 22 weeks from 1 September to 2 February, up from R10.3bn in the corresponding period a year earlier, the country's second biggest pharmacy group by sales and store network said.

Chief executive Ivan Saltzman said Dis-Chem saw a significant recovery in many of its older stores located in regional malls, where footfall had declined as people shopped near their homes during the Covid-19 pandemic.

"This, coupled with our conveniently located stores' excellent trade, has resulted in good sales growth over a challenging time where consumers continue to search for value," he said, although he said margins still lagged pre-coronavirus crisis levels.

Retail revenue rose by 10.3%, with like-for-like sales growth of 5.1% on strong sales of healthcare, vitamins and chronic drugs as consumers focussed on preventative healthcare.

The newly acquired 33 Baby City stores, which sells baby products, contributed R73.4m to retail revenue from 1 January, the date from which the deal became effective, Dis-Chem said, adding that overall retail online sales jumped by 218.7%.

In the wholesale business, revenue grew by 20%, with good growth from external customers like private hospitals, The Local Choice pharmacy and independent pharmacies.

Dis-Chem, which competes with Clicks Group, will participate in Covid-19 vaccine distribution and administration tenders across all three phases of the rollout, as advertised by the Department of Health this month.

South Africa is this week expected to start inoculating healthcare workers with Johnson & Johnson's Covid-19 vaccine as part of a research study.

($1 = R14.7210)

(Reporting by Nqobile Dludla; Editing by Tom Hogue and Edmund Blair)

Source: Reuters