Managing the impact of Covid‑19
After South Africa declared a state of disaster on 15 March 2020 in response to the outbreak of Covid‑19, the country entered a national lockdown from 27 March 2020 to restrict infection rates and curb the spread of the pandemic.
Following a five-week period of hard lockdown, trading restrictions were gradually eased over subsequent months as the government aimed to balance the human and economic impacts of Covid‑19.
As essential healthcare service providers Clicks and UPD traded throughout the national Covid‑19 lockdown, with restrictions on the sale of certain product categories at the beginning of the lockdown.
Protecting health of employees
The health and safety of employees was paramount throughout the pandemic. World Health Organisation and Department of Health hygiene protocols were implemented and maintained across all stores, distribution centres and head office. Employees who displayed symptoms of Covid‑19 where immediately requested to self-isolate and sent to be tested for Covid‑19. Any employee who tested positive for Covid‑19 was required to follow established Covid‑19 protocols before returning safely to work.
Plexiglass screens were installed at pay points and pharmacy counters in stores while face visors were supplied to customer-facing staff to reduce the possibility of infection and protect both customers and employees. Flu vaccinations were offered at no cost to staff to support their immunity levels.
Employees were required to work from home where possible and in cases where employees were unable to work the company accessed government assistance benefits on behalf of employees. Bonuses were paid to customer-facing staff in recognition of their commitment during the crisis.
Ensuring customer safety
Health and safety standards in stores included more frequent cleaning of stores, making wipes and sanitisers available throughout the stores and restricting all non-essential interaction with customers, such as beauty makeovers. The number of customers in store was restricted and social distancing protocols applied. When any store employee tested positive for Covid‑19, the store was temporarily closed for deep cleaning to safeguard employees and customers.
Stores and trading restrictions
While Clicks stores remained open, trading hours were restricted and only essential products could be sold from the start of the lockdown until 30 April 2020. All Musica, The Body Shop and Claire’s stores were closed from the start of the lockdown. The Body Shop stores reopened from 1 May while Musica and Claire’s stores reopened from 1 June 2020 when the country moved to lockdown level 3. Rental relief was negotiated with landlords for stores which were closed during lockdown.
Convenience and safety driving online demand
Online sales in Clicks increased strongly during lockdown as consumers chose to stay at home to reduce the risk of contracting Covid‑19. Online distribution capacity was increased to cope with the greater demand for online ordering and delivery to ensure an efficient and convenient service to customers. Clicks also ensured convenient access to medication to minimise time away from home for customers.
Commitment to community support
The group was committed to supporting those most vulnerable to the financial devastation caused by the pandemic. The three executive directors and non-executive directors donated one-third of their salaries and fees for three months to the Solidarity Fund. Community support included extending the free primary care clinic services offered to Clicks customers with no medical cover to five days a week from the normal one day. Clicks remained committed to fair pricing and ensured that prices on essential hygiene products and personal protective equipment were not increased during lockdown. In support of frontline public healthcare workers, Clicks donated 10 000 flu vaccines to the Western Cape Department of Health and Department of Social Development.
Protecting shareholder value
Management responded decisively to the lockdown, immediately implementing measures to reduce the group’s cost base to off-set the impact of slower sales. Cash preservation was a priority and the board took a decision not to declare an interim dividend to ensure greater balance sheet strength owing to uncertainty over the duration and severity of the lockdown.