Clicks, the mainstay of the Clicks Group, posted a strong performance in the 18 weeks to January as the health and beauty category, once again, attracted price conscious consumers.
David Kneale, the group chief executive, said yesterday that consumers were highly value conscious over the festive season and responded favourably to promotional offers.
“Shoppers also looked for new and differentiated products and we definitely experienced stronger sales growth in merchandise categories which offered innovation.”
At Clicks this included new fragrance offerings and house brand electrical appliances such as hairdryers, while the new format Xbox helped sales in the gaming division.
Kneale added that a feature of the reporting period was the rapid decline in selling price inflation, which measured only 0.6 percent for the retail businesses, compared with 8.9 percent in the prior year.
He said a major factor behind the decline in inflation was the strength of the rand. The group reported that total retail sales increased 14.2 percent, and 11.4 percent on a same-store basis.
During the period Clicks, which accounts for more than 88 percent of the group’s retail sales, increased sales by 16.8 percent off a high base as the brand continued to gain market share in its core merchandise categories.
Comparable store sales grew by 13.6 percent. Clicks achieved real growth of 12.7 percent, with selling price inflation of 0.9 percent.
Musica continued to gain market share over Christmas although sales for 18 weeks declined by 2.1 percent as inflation reduced to minus 0.4 percent. Gaming and lifestyle merchandise showed good growth, but CD sales slowed mainly due to limited new releases, the group said.
The Body Shop increased unit sales although turnover declined by 5.3 percent as the business experienced selling price deflation of 10.1 percent.
United Pharmaceutical Distributors, which is a pharmaceutical wholesaler supplying retail pharmacies, private hospitals, dispensing doctors and retail health stores, increased turnover 6.5 percent as the market slowed due to lower inflation and the faster growth in sales of lower-value generic medicines. Total sales for the group increased 9.5 percent to R5.1 billion, with inflation declining to 1.8 percent from 9.4 percent.
Funeka Beja, an equity analyst from Afena Capital, said Clicks had a strong performance demonstrating the continued resilience of health and beauty, which was well-supported by a good performance in general merchandise sales.
Shanay Narsi, an analyst at BOE Private Clients, said that at Clicks very low inflation and high volume trade implied that trading density had improved and therefore the retailer had become more efficient. “So margins should widen,” he said.
The Clicks Group share price closed 3.14 percent lower at R41.99 on the JSE yesterday. - Samantha Enslin-Payne