Photo: Henk Kruger/African News Agency (ANA).
Photo: Henk Kruger/African News Agency (ANA).

Dis-Chem Pharmacies estimates the cost of wage strike at R50million

By Sandile Mchunu Time of article published Feb 15, 2019

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DURBAN – Dis-chem Pharmacies has estimated the cost of ongoing industrial action by its striking employees to be R50million as some of the workers continue to embark on a strike, demanding an increase in wages.

However, the group said yesterday that since the labour unrest was still ongoing, the full quantum of the impact was still unknown, but it expected earnings growth to be below its guided range.

Dis-Chem workers have been on strike since November 16 last year.

Chief executive Ivan Saltzman said the current ongoing industrial action had heavily impacted the December trade and continued to affect the group.

“As a result, we experienced an extremely tough trading month with retail revenue growth at 6.2 percent and retail comparable store revenue declined by 2.5percent, which was well below our expectations,” Saltzman said.

He added that although the company had contingency plans in place to ensure minimal disruption at their retail stores, they had lost opportunity sales in December, primarily due to stock supply challenges.

“This was further supported by the fact that we reported our lowest market share gains of the financial year in the December month,” Saltzman said.

The workers, represented by the National Union of Public Service and Allied Workers (Nupsaw), are demanding a minimum wage of R12500 across the board; an annual increase of 12.5percent, guaranteed for the next three years, for all employees; and a guaranteed annual bonus.

“In addition, post discussions with the CCMA, a requirement to take back all employees that have transgressed picketing rules, have damaged company property and attacked fellow employees and damaged their possessions,” Dis-Chem said.

It added that 2300 employees, the majority from its wholesale operations, were part of the protected strike, but at the start of the industrial action less than 13 percent of its employees were registered as Nupsaw members.

Despite the ongoing strike, Dis-Chem reported a 10.7percent increase in revenue to R9.4billion for the 22 weeks to February 2.

Its share price closed 6.17percent lower on the JSE yesterday at R24.96.


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