December 8, 2021

Dis-Chem says lockdown accelerated its digital advance by five years

Dis-Chem Pharmacies on Tuesday (24 August) reported income progress of 16.3% to R13 billion for the 22 weeks ended 6 August 2021, amid the backdrop of Covid-19, vaccine rollout and July’s civil unrest and looting.

South Africa’s second-largest retail pharmacy chain stated that regardless of the prevailing setting, retail income elevated by 16% to R11.5 billion over the corresponding interval, with comparable gross sales progress at 6.7%.

The group stated it continued to expertise a change in its gross sales and transaction gross margin combine resulting from altered shopper behaviour through the various lockdown ranges.

“The sales of lower margin Covid- related products, which are decreasing in price, increased disproportionately during and subsequent to the second and third waves of infection, resulting in a transactional margin growth lagging sales growth over the comparable period,” it stated.

A normalisation of transactional gross margin combine and gross sales contribution is anticipated within the 2023 monetary yr, with a concomitant enhance within the whole earnings margin.

Dis-Chem stated that for the reason that preliminary lockdown, it has quickly tailored to the e-commerce setting, with the sudden good thing about accelerating its digital advance by as a lot as five years. On-line gross sales noticed progress of 14.4% over the comparable interval which already included a rise of 345.9% over the 2019 comparable interval.

“The quick deployment of an additional 44 e-commerce hubs and increased investment in the Group’s e-commerce platform enabled it to meet increased online demand. The most recent launch of Dis-Chem DeliverD, a one hour on-demand delivery service, has been trialled in 31 stores and has seen positive consumer uptake. This service is being rolled out to a further 30 stores within the next month.”

Dis-Chem stated it can open its landmark 2 hundredth retailer in September. Throughout the 12 months to 06 August 2021, eighteen Dis-Chem and three Child Metropolis shops have been opened.

Wholesale continues to carry out effectively with income rising by 17% to R9.5 billion because the group’s impartial and franchise buyer bases proceed to develop. Gross sales to its retail shops, which contribute 84% of wholesale income, grew by 16.6%. Gross sales to Impartial Pharmacies elevated by 10.1% and, to The Native Selection (TLC) franchisees, gross sales elevated by 34.7%, it stated.

The variety of TLC franchisees as at 06 August elevated to 132, in comparison with 108 on the finish of the corresponding interval, the group stated.

Dis-Chem stated that through the civil unrest and looting in July, three shops and one Child Metropolis retailer had been impacted with inventory and property stolen or broken, amounting to roughly R40 million.

Quite a few shops had been closed in KwaZulu-Natal and Gauteng with the misplaced gross sales throughout this era estimated at roughly R70 million, leading to a R15 million loss in whole earnings, the group stated.

“We continue to take market share in all categories and have delivered strong cash generation. It remains challenging that the full extent of the impact of Covid- 19 still unknown,” stated CEO Ivan Saltzman.

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