Dis-Chem continues expansion

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Johannesburg - Beauty and health retailer Dis-Chem, which has opened more than 50 stores in the past five years, is putting a tentative toe into the Africa market by opening a store in Namibia this year, along with 10 in the local market.

This would bring the family-owned retailer’s stores to 84 by the end of this year.

“The store in Namibia will be our first store outside South Africa and the rest of the stores will be opened right across the country,” business relationship manager Trisch Rosema said.

The retailer had 11 stores in 2009 and had rolled out stores in all South African provinces since then, she said.

The company was founded by husband and wife Ivan and Lynette Saltzman in 1978 and has six directors.

Rosema said although the dispensary remained a large part of the business, the front store section, which stocks cosmetics, health products, baby strollers and other items, had grown over the years.

“This is because we have increased our range and have more services than before.”

Most Dis-Chem stores include a clinic with two qualified nurses, a skin care salon, baby centre and weight-loss section, while some run hair salons and chronic diseases sections.

“We offer what customers do not expect and we also do not go for any particular income group. We offer services from birth to the elderly.”

Rosema said that Dis-Chem was not struggling to find the right locations to roll out 11 stores this year, as more malls were being built with a Dis-Chem outlet in mind. In the past, it had opened in smaller shopping centres but had been receiving invitations to open in up-market malls.

As with other retailers such as Clicks, Woolworths and Pick n Pay, Dis-Chem’s drawcard has been its loyalty programmes, which have links with FNB’s eBucks, Absa Rewards and recently Legacy Lifestyle. Rosema said some programmes allowed new mothers to access the in-store baby centre, and pre- and post-natal benefits.

Although Dis-Chem’s footprint was smaller than that of Clicks, Absa Investments retail analyst Chris Gilmour said: “It is a force to reckon with.”

The expansion was measured and the retailer also wanted to make sure that there was no cannibalisation, he said.

It was difficult to make definite comparisons as Dis-Chem was not listed and was much smaller than Clicks. However, he thought that the retailer had a larger range and was good at sourcing products.

In the year to June last year, Clicks opened 22 stores, bringing its total to 442, with 331 having in-store pharmacies. It planned to expand its footprint by 25 stores this financial year.

Gilmour said 10 years ago, Dis-Chem was found only in smaller centres.

“That has changed. They are still in those shopping centres but are also found in the up-market centres.”

He said Dis-Chem would have a good reception if it decided to list. From a consumer perspective, he found Dis-Chem’s prices more accommodating. “From a customer’s point of view, its prices are good, which means it is doing a whole lot of good sourcing and merchandising assortments.”

Rosema said Dis-Chem had never been threatened by Clicks extending its services to include dispensaries. “We did not experience any slump in our dispensary sales when our competitor started operating pharmacies.” - Business Report


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