DURBAN – Dis-Chem Pharmacies said on Tuesday in a trading update for the 24 weeks from March 1 to August 15, that it had experienced significant online sales growth of 344 percent.
The quick deployment of additional hubs together with an investment in its e-commerce platform enabled it to meet the increased demand as best as possible. “Covid-19 has matured the e-commerce environment and consumer adaptation by three to five years,” the group said.
It reported revenue growth of 8.8 percent to R11.7 billion compared with last year.
Chief executive Ivan Saltzman said in the 4½ months, Dis-Chem played a vital role as one of the country’s essential service operators, supplying customers with the necessary medicines and other products during the nationwide lockdown.
“Despite the negative factors that constrained regular trading,
we remained committed to meeting the needs and demands of our
customers. “We continue to benefit from the resilient nature of the industry in which we operate and are encouraged by elements of the changing health-care landscape that highlight the importance of our core dispensary and clinic offerings,” Saltzman said.
The group saw its retail revenue increase by 6.3 percent to R10.4bn compared with last year while comparable sales growth was 1.5 percent.
Dis-Chem said it experienced a change in its sales and gross margin mix due to sales restrictions during level 5 of lockdown, with the sales of lower margin Covid-19 related products increasing and reduced impulse purchases because of lower foot traffic.
“Covid-19 related products represented approximately 9 percent of total retail sales and 13.8 percent of front shop sales.
“The group is slowly starting to see the sales and gross margin mix normalise,” the group said.
Its wholesale revenue increased by 16.4 percent to R8.6bn and sales to its retail stores, which contribute 84 percent of wholesale revenue, grew by 13.8 percent. Its sales to independent pharmacies and The Local Choice franchisees increased by 39.9 and 27 percent, respectively.
Dis-chem also said that it lost R200m in revenue during the hard lockdown in April as a result of trading restrictions, despite falling into the category of an essential service provider.
Regulations implemented during the different levels of lockdown restricted the group from selling all its products and trading within its usual operating hours. “During level 5 of the lockdown period, the group was unable to sell 20 percent of its products, including higher-margin products from its beauty category. Lost revenue as a result of the restriction was about R200m for April,” it said.
Dis-Chem will release its half-year results for the six months to end August on November 5. Dis-Chem’s share price rose 5.81 percent to R18.77 at yesterday’s close of the JSE.
BUSINESS REPORT