The demand for weight-loss products Ozempic and Mounjaro boosted Clicks pharmacy sales in the half year to February with the company expecting the momentum to continue given the increase in diabetes patients.
Ozempic, which has grown in popularity worldwide, is prescribed to diabetic patients to help them lose weight.
Clicks pharmacy, which contributes 25.7% to total turnover, grew turnover by 9.2% to R4.7bn, driven by all scheduled medicine classes. In the category requiring a doctor’s prescription, diabetes “performed exceptionally well due to increased demand for Ozempic and Mounjaro,” said CEO Bertina Engelbrecht.
“The turnover we did in the six months is equivalent to the turnover we did in the financial year 2023.”
She does not expect the demand to taper off given the increase in diabetic patients.
Medical aids companies have reported an increase in chronic diseases including diabetes, which have pushed up premiums.
“In South Africa, diabetes is a massive problem,” said Englelbrecht.
Globally, the demand for Ozempic and Wegovy, also a weight-loss product for diabetes patients, pumped $26bn into maker Novo Nordisk last year.
Clicks retail pharmacy maintained its market share of 23.8% despite the delay in the approval of the new pharmacy licenses. Clicks opened 20 new pharmacies in the six months to February.
“We have a steady pipeline of pharmacy licenses which inspires confidence that we will resume our market share gain in retail pharmacy this year,” said Engelbrecht.
Group income rose 8.9% to R7.1bn. Clicks, which has 950 stores, plans to open 45 to 55 stores and pharmacies during the 2025 financial year. It is targeting 1,200 stores in the coming years. Clicks says 53% of South Africans live within 5km of one of its pharmacies.
Clicks will spend R1.025bn this year, with 56% of the money allocated to opening new stores and pharmacies as well as store refurbishments
Clicks will spend R1.025bn this year, with 56% of the money allocated to opening new stores and pharmacies as well as store refurbishments.
The front shop health segment was a top performing category, up 9.8%, with customers focusing on sports, slimming and supplements products. Beauty and personal care also recorded strong growth, boosted by private labels and promotional campaigns. General merchandise reported a 4.5% increase in turnover to R2.8bn.
“Our performance in general merchandise was disappointing and will be an area of focus as we seek to improve our competitive positioning, promotional mechanics and range assortment,” said Engelbrecht.
It lost market share in household electrical appliances while Clicks continuing to gain market share in electrical beauty products.
Engelbrecht said the company “had quite a run during Covid and afterwards during the height of load-shedding when people were buying air fryers, and at some point we sold a record number of air fryers”.
She said the merchandise segment did not capitalise on the popularity of some high end products. The company may introduce some new brands at selected stores while a wide variety of such products will be available online.
Outside South Africa, Clicks 54 stores in Southern Africa delivered turnover growth of 53%, outperforming local stores, although their contribution overall was small.
Engelbrecht said the company would add more stores outside South Africa and has set its eyes on entering Zambia.
Clicks has entered the high-end beauty sector through its 22% shareholding in ARC Stores, which sell premium products.
“We thought about developing such concept [of selling premium brands] and we decided against it. You can only really get that [high-end brands] if you're a specialist format store. ARC is giving us exposure to that market and the higher LSM customers, and it is doing exceptionally well.”
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