Clicks' pharmacies hit as flu season goes AWOL - usually 10 million South Africans end up sick
In an otherwise sterling trading update, Clicks warned that is pharmacy sales have been hit by the lack of the traditional winter cold and flu season in South Africa.
For the first time in decades, the flu season has still not arrived in South Africa, according to the National Institute for Communicable Diseases (NICD). This is thought to be due to the protective measures South Africans are taking against Covid-19.
“The incidence of colds and flu has been limited as South Africans are wearing face masks during the pandemic, social interaction has been limited, schooling restricted and large numbers of people are working from home,” Clicks said in its trading update.
According to a 2019 study, on average, 10 million South Africans end up infected with the flu each year. Flu normally kills over 10,000 South Africans and costs the economy billions of rands every year due to the deaths and absenteeism from sick days.
Capitec’s CEO last week noted that the company has seen a large decline in absenteeism due to fewer people taking sick leave. Usually, flu season spreads quite quickly among staff this time of year, he said. This year, this has not happened.
Clicks says the traditional winter cold and flu season is generally a strong driver of sales.
Still, despite this, and the stringent local lockdown measures, the group reported strong sales, and its share price rose by more than 5% to around R240 by lunchtime on Wednesday.
Group turnover for the period of almost a year to last week increased by 10% to R32 billion. It expects its headline profit to climb by between 10% and 15% for the year.
In a trading update for the past six months, the group reported that retail health and beauty sales, including Clicks and the franchise brands of The Body Shop, GNC and Claires, rose by 7.7%.
The lockdown has changed customer behaviour with a decrease in Clicks clients visiting stores, specifically at large regional malls. But the company saw an increase in the average basket value, while online sales have shown “significant growth”.
Its wholesale pharmaceutical arm, United Pharmaceutical Distributors (UPD), saw turnover growth of 11.4% thanks to increased demand for medicines and healthcare products from hospitals.