Clicks Looks Immune To Recession
Apr 08 2010
Retail Wrap >>

THE New Clicks group – which a couple of years ago was looking tired and uninspired - is looking like working its health care focus into a very convincing retail mix.

A trading update - covering the 18 weeks to end January 3 – once again show that its flagship Clicks chain is in fine fettle. Clicks, which is headquartered in Woodstock, managed to up turnover 16% to R2.9 billion, driven - according to group CEO David Kneale - by growth in the health and beauty merchandise categories.

“This again underlines the defensive qualities of the business and the benefits of a value offer in a tight consumer economy,” says Kneale.

The health and beauty focus has largely differentiated the New Clicks group from SA’s other major retailers, who have not played the ‘pharmacy’ angle quite as aggressively. At this point it’s hard to believe New Clicks’ pharmacy plans were met with a good deal of scepticism all those years ago.

Whether Clicks’ recent successes inspire the likes of Shoprite and Pick n Pay to look more seriously at health care as serious growth pillar remains to be seen. At financial year end August 2009 Clicks had increased its national pharmacy base to 207 after opening 50 in-store dispensaries during the year. The potential of Clicks’ health care focus was plain to see in the fact that during the 2009 financial year, UPD had seen sales to the core customer groups of Clicks, Clicks Direct Medicines, hospitals and Link pharmacies increasing to 76% (previously: 65%) of its wholesale sales. One also needs to contextualise Clicks’ admirable performance over the first 18 weeks of the new financial year. The Christmas trading period was largely characterised by a cautious consumer mood and festive spending was also curtailed by a shorter school holiday period.

The latest trading statement certainly suggests the New Clicks group - which also incorporates pharmaceutical group UPD, Musica and The Body Shop – will surpass last financial year’s total income of R3.1 billion in 2010.

Source: Cape Business News, 7 April 2010