Clicks pharmacy chain reports positive 20-week results

South Africa’s leading pharmacy, health and beauty retailer, Clicks, has announced positive results in its 20-week trading update to January 2020, driven by promotions and gifting.

In the 20 weeks leading up to 12th January 2020, Click’s Group’s turnover rose to R12.9bn (US$864m), an increase of 9.9% from the previous 20 weeks, which is almost twice the percentage increase of the same period in 2019. Retail and health sales increased by 9% and its pharmaceutical distribution arm, UPD, reported a 13.1% growth in turnover.

Chief Executive Vikesh Ramsunder said the positive results were achieved “despite mounting challenges in the operating environments” and demonstrate the resilience of the Clicks brand. Clicks’ recent success is unusual in the current South African retail market, which is marked more by store closures and decreasing profits. Clicks opened its 704th outlet during 2019 and spent R647m (US$43.5m) on expanding its network of stores and pharmacies. Mr Ramsund explained that a combination of Clicks’ wide range gifting products, value promotions and the convenience of the Clicks network were largely responsible for the recent sales growth.

Main competitor pharmacy chain Dis-Chem has not announced recent results but in its interim financial results to August 2019, it reported an increase in retail turnover of 11.8% to R10.7bn (US$717m). At the time it had 158 outlets with plans to open 13 more by the end of the year.

Besides UPD, Clicks Group includes its namesake Clicks health and beauty brand, multinational brands The Body Shop and Claire’s, speciality health & wellness retailer GNC and Musica, its entertainment retail brand. It has 545 pharmacies and 49 outlets across the southern Africa region.

However, despite recent retail success, Clicks Group share price decreased by nearly 5% in the weeks since it published the 20-week update.