Dis-Chem’s load shedding bill climbs to R36 million
Retail pharmacy group Dis-chem showed a robust trading performance amid challenging economic headwinds, with group revenue increasing by 8.7% for the six months that ended 5 February 2023.
In a trading update on Friday (17 February), Dis-Chem noted a 7.5% increase in retail revenue over the period, excluding vaccines and Covid-19-related lines, while external wholesale revenue growth was up 18.7%.
However, the group noted that, due to load shedding over the six months, diesel costs across its stores had increased by 54% to R36 million.
Despite this, the group’s strategic early investment in generator capacity has resulted in minimal disruption to its ability to trade, it said.
Retail revenue showed a 3.1% increase over the corresponding 2021/22 period – attributable to a strong performance in beauty and household, confectionary, electronics and appliances sales.
“During the period, Dis-Chem continued to increase its dispensary market share, extending its position as South Africa’s largest retail pharmacy group by dispensary market share,” said Chief executive Ivan Saltzman.
“The group experienced a strong recovery in the beauty category ahead of market recovery. The group continues to advance its ambitions in the baby category with steady improvement in baby-focused trade, specifically in Dis-Chem Baby City stores, highlighting the destination status of the brand,” he added.
Saltzman noted that the normalisation of the category mix is total income margin supportive, which continues to support the trajectory of earnings delivery.
The table below shows the retail revenue growth by category.
Regarding wholesale, revenue increased by 8.6% for the period compared to the corresponding period, with sales to its own retail stores increasing by 7.0%, while external customer revenue grew by 18.7%.
External wholesale revenue from sales to independent pharmacies increased by 16.3%, attributable to a 6.6% increase in the number of customers and was supplemented by greater
support from existing customers.
“Despite the challenges, Dis-Chem continues to maintain its healthcare and nutrition market share and market leadership position,” said Saltzman. He added the group now has a store base of 312 stores, comprising 258 Dis-Chem and 54 Baby City stores.
The Baby Boom stores acquired on 1 March 2022 have all been rebranded to Dis-Chem Baby City and contributed R27.6 million in baby revenue for the period.
Read: Load shedding costs Pick n Pay R60 million a month – the ‘permanent new reality’