Trading update: Dis-Chem sees double-digit revenue growth

Driven by a sustained return of customers to regional shopping malls, where the group’s stores are more established. 
Topping the group’s current to-do list is the rebranding of its newly-acquired Medicare stores, to align with the Dis-Chem brand. Image: Waldo Swiegers/Bloomberg

Listed pharmacy retailer Dis-Chem reported robust growth of 15.3% in revenue for the 21-week period ending January 26 2022 (to R12.7 billion) in a trading update on Monday.

The double-digit growth is reportedly driven by a sustained return of customers to regional shopping malls, where the group’s stores are more established. 

Dis-Chem says for the period it saw a 15.5% rise in retail revenue to R11.4 billion and an increase in like-for-like sales of 5.5% compared with the previous comparable period.

Read: Dis-Chem founders, execs untangle themselves from group warehouse leases

The group also reported a 10.6% rise in wholesale revenue to R9.1 billion, increasing sales to its retail stores by 10.1%. 

“We continue to trade well, with market share gains across all core categories, supported by further normalisation in gross margins,” says Dis-Chem group CEO Ivan Saltzman.

“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.”

“In an environment where the pandemic continues to constrain consumers, our everyday low price strategy, differentiated service offering and newly opened conveniently located stores remain cornerstones to delivering consumer value, reinforcing the Dis-Chem brand’s destination status and the resilient nature of our business,” he adds.

Covid-19 trends

A less severe fourth wave of Covid-19 infections – which has been dominated by the Omicron variant – has not only seen a normalisation in sales for certain product categories, but also a notable drop in vaccine uptake. 

Dis-Chem observed a drop in sales of preventative healthcare products – which include vitamins and nutraceuticals – during the December and January periods. 

“There are early signs of normalised sales returning to this category where we continue to maintain our market leading position,” the group notes.

Having administered 895 000 Covid-19 vaccine doses in the period, the group says it has seen a slowdown in demand for vaccines since December 2021,  adding that it expects this trend to continue. 

Read:
Dis-Chem gets tough on unvaccinated employees
CompCom’s ‘R500 per PCR test’ recommendation could leave SA with fewer options

With more customers returning to stores, the group’s online sales are also normalising, coming off of a high base in the previous comparable period, when customers directed their purchases online. 

Group online sales in the 21-week period grew by 14.3%, supported by growth in the group’s on-demand DeliverD service. 

Rebranding Medicare

Topping the group’s to-do list is the rebranding of its newly-acquired Medicare stores, to align with the Dis-Chem brand.

Dis-Chem says it is well on its way to achieving this, as it has already accelerated the migration of 49 Medicare stores – which the group bought in October 2021 –  onto the group’s common technology platform.

“The next phase of the Medicare integration into the group is the rebranding, to Dis-Chem, of approximately 40 Medicare stores, supporting the expansion of our store network, particularly in new geographies where the Dis-Chem brand has been underrepresented,’’ says Saltzman.

AUTHOR PROFILE

COMMENTS   1

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

Buy this share or support them as a consumer if you support shady self-dealing and price gouging. Both are facts not allegations. With those two black marks I would not trust their reported numbers.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: