Dis-Chem claims market-share gains in constrained environment


Dis-Chem claims market-share gains in constrained environment

Published Date: 2020-02-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

Dis-Chem claims market-share gains in constrained environment

The discount pharmacy group says the weak macroeconomic environment is unsupportive of business as customers trade down.

Dis-Chem says its customers are putting fewer items in their baskets as the weak economy forces cutbacks. However, the discount pharmacy chain says it is still growing market share in its core categories.

In a trading update for the first five months of its financial year, the group said it benefited from improved trade terms with its suppliers over the period, while managing its inventory levels better.

Retail revenue rose 9.2% to R9.4 billion for the 22 weeks to 2 February, with comparable store revenue growth of 2.1%. It raised prices by an average 1.2%. The 12 new stores it opened over the period contributed R145 million to revenue and it said it would continue to expand to take advantage of a consolidating pharmacy industry in the country.

Wholesale revenue increased by 18.3% to R7.1 billion, with sales to its retail stores rising 18.2% and sales to external customers including its The Local Choice (TLC) franchise and independent pharmacies growing by 30.7% and 14.9% respectively. It said its acquisition of Quenets Pharmaceutical Wholesalers at the end of 2018 supported sales. It now has 110 TLC franchise stores versus 91 at the end of the corresponding period.

Results for the year to end-February are scheduled for release on 20 May. Its shares declined 1.9% to R23.55 yesterday.

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