A healthy model for medicine
Dis-Chem or Clicks: which to buy?
Clicks and Dis-Chem are locked in a race. Both are doing well — but will that continue with SA’s weak consumers?
SA may be dealing with a nasty economic headache and depressed consumers, but that hasn’t stopped people from flooding through the turnstiles at SA’s two JSE-listed pharmacy groups, Dis-Chem and Clicks."It is not an easy call to make," says Daniel Isaacs, an analyst at 36One Asset Management. Both pharmaceutical groups are led by experienced management teams and pin their hopes on the drug store operating model.The two heavyweights are also in something of a race for space. In Clicks’s year to August, 31 stores were opened, while another 80 have been added under an outsourcing agreement struck with Netcare in late 2016. Clicks has further set its sights on opening 20-30 stores/year over the next seven to 10 years. "Our target is 900 stores," says David Kneale, who has been CEO since 2006.That’s an awful lot of medication. Isn’t that overkill? "Getting to 900 stores poses no problems for Clicks," says Kneale. "There are 1,100 convenience shopping centres of between 5,000m² and 25,000...
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