Dis-Chem grows sales as customers venture back out


Dis-Chem grows sales as customers venture back out

Published Date: 2021-02-18 | Source: Stephen Gunnion | Author: Stephen Gunnion

Dis-Chem grows sales as customers venture back out

The pharmacy and healthcare group says although customers are returning to its stores in shopping centres, consumer behaviour has changed.

Dis-Chem says more customers are returning to its older stores in regional shopping centres, helping to support sales over the past five months. However, it says many are opting for its convenience centres located outside malls while others still prefer to shop from the safety of their homes, boosting online sales.

In a trading update for the 22 weeks to 2 February, the pharmacy and healthcare group reported a 10.3% rise in retail revenue to R10.4 billion. It claimed market share gains in all its core categories, with healthcare, vitamin and chronic drug sales doing particularly well as consumers continued to focus on preventative healthcare. Like-for-like revenue grew 5.1% and it raised prices by an average 3.6% over the period.

Excluding Baby City, which it acquired on 1 January, Dis-Chem said like-for-like sales at stores based in shopping centres shrank 2% over the five-month period, an improvement on the 8% contraction in the first half of its financial year. Like-for-like sales at its convenience centres rose 10.2%. It added 10 new stores over the period, which contributed to R123 million to revenue, while the 33 Baby City stores contributed R73.4 million in the space of a month. Online sales more than tripled from a year earlier.

Wholesale revenue grew by 20% to R8.6 billion over the 22-week period, with sales to its retail sales increasing by 18.5%. Sales to external customers grew by 30.6%, which it attributed to its growing distribution network and greater support from The Local Choice and independent pharmacies.

Dis-Chem held back on an interim due to Covid-19 and as it eyed more deals following its purchase of Baby City. In December, it said it was buying healthcare and pharmacy group Pure Pharmacy Holdings to expand its store base into areas where it's unrepresented. It will pay R282 million for the chain of 50 pharmacies, which trade as Medicare Health.

Dis-Chem's results for the year to end-February are scheduled for release on 21 May.

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