Dis-Chem reports revenue growth amid shift in consumer dynamics
Dis-Chem Pharmacies reported revenue growth of 15.3% to R12.7 billion, in the 21 weeks from 1 September 2021 to 26 January 2022, compared to the corresponding period in the prior year.
It comes against a backdrop of an accelerated migration of Medicare stores – acquired effective October 2021 – onto the group’s common technology platform.
“We continue to trade well, with market share gains across all core categories, supported by further normalisation in gross margins. This is being driven by a shift in consumer dynamics and a sustained return to regional shopping malls, where many mature Dis-Chem stores are located,” said CEO Ivan Saltzman.
Retail revenue increased by 15.5% to R11.4 billion over the corresponding period, with comparable sales growth at 5.5%, driven by the gradual return to shopping malls, it said.
As a result of the less severe Omicron-variant fourth wave, and relative to the base which resulted during the more serious second-wave, sales growth of preventative healthcare products, including vitamins and nutraceuticals were muted during December and January, said Dis-Chem.
As at 26 January, during the 21-week period Dis-Chem had administered 895,000 Covid-19 vaccine doses. The group said that following six months of high demand for vaccinations, the company has experienced subdued vaccination demand from early December 2021.
During the 21-week reporting period, the group opened seven new Dis-Chem stores, contributing R75 million to retail revenue. The acquisition of the Medicare group effective 1 October 2021 added a further 49 additional stores to its store portfolio. The Group now has a store base of 290 stores, comprising 206 Dis-Chem stores, 49 Medicare and 35 Baby City stores.
“Consistent with its strategy of having at least one primary healthcare clinic in every Dis-Chem store, the Group is on track for every Baby City store to have an operational Moms and Baby focused clinic by April 2022,” Dis-Chem said.
Off a high base in the corresponding period, where shopping behaviours were directed online during the more serious second wave, online sales grew by 14.3%, it said.
Wholesale revenue increased by 10.6% to R9.1 billion for the 21 weeks compared to the corresponding period, with sales to its retail stores increasing by 10.1%.
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