Clicks braces for post-lockdown sales pressure

Pharmacy group Clicks expects the operating environment to be tough post-lockdown, after reporting an “unprecedented” surge in sales as customers stocked up on health-care and hygiene products.

Load-shedding could add additional pressure, with the group deciding not to declare an interim dividend, despite double-digit profit growth in its six months to end-February.

Profit after tax grew 12.9% to R850m, with the group’s store expansion continuing during the period.

Clicks opened 17 stores in the six months to expand its retail footprint to 721 stores, and increased its pharmacy network to 572 after opening 27 pharmacies.

The group said its plans to open 38 new Clicks stores and 40 pharmacies in the financial year were unchanged.

Clicks said trading conditions during the Covid-19 lockdown had deteriorated, and the group had stopped selling non-essential products.

“Trading conditions are expected to be extremely tough for the remainder of the financial year as the extent and economic impact of the Covid-19 pandemic are unknown,” the group said.

This could be compounded by Eskom load-shedding, which remains a risk to retail sales, particularly in the higher-demand winter season, the statement said.

“The recent sharp depreciation in the value of the rand could impact on selling-price inflation towards the end of the financial year and place further pressure on constrained consumers,” Clicks said.