Clicks grows retail sales over Christmas
Health and beauty retailer Clicks increased sales volumes over the festive season, with record daily sales on the Friday before Christmas.
The retailer released a voluntary sales update for the 20 weeks to January 14 noting that overall group sales, including from its medicine distributor, grew 8% year on year to R16.8bn.
Clicks is one of the few retailers that keeps growing its sales volumes year on year despite the weak economy.
Its consistent performance attracts a high number of foreign investors who hold the stock, even though the stock is considered expensive.
Clicks same-store sales grew 8.4%, just above price increases averaging 7.5%, showing it is selling slightly more goods than before. The week preceding Christmas was a record trading week for the chain.
Clicks may be benefiting from its affordable gifting options as cash-strapped consumers buy down.
Constrained consumers focused on essentials and bought more affordable items such as chocolates, biscuits, cleaning products and many Clicks private-label brands.
Sasfin analyst Alec Abraham said that Clicks appears to have continued to steal market share.
Its retail sales growth was well ahead of the pharmaceutical and cosmetics retail segment, which grew 5.8% from September to November as measured by Stats SA.
Abraham said Clicks’ apparent market share growth “is the outcome of the group’s ubiquitous presence and consistent store opening success.
“Another competitive advantage is the group’s excellent stock management, where the focus on the own-brand product range drives efficiency and enhances profitability.”
The Sorbet franchise, which Clicks bought in June 2023, increased sales 12.3% over the 20 weeks.
Turnover at pharmaceutical distributor UPD fell 6.3% due to problems with the implementation of a new software system at its distribution centres. As software implementation stabilised, sales rose 6.9% in the six weeks to January 14.
UPD, which sells medicines, did not renew contracts with two clients to focus on more profitable business.
“This strategy is expected to benefit [margins] and support the acquisition of profitable new clients in the year ahead,” it said.