Integrated Annual Report 2018

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Group stategy

Clicks Group’s strategy is to create sustainable long-term shareholder value through a retail-led health, beauty and wellness offering

Strategic drivers of longer-term growth

Market dynamics

Favourable market dynamics

  • Healthcare markets are defensive and offer long-term growth opportunities in South Africa.
  • Improving living standards, increasing urbanisation and longer life expectancy is contributing to a growing market for health and beauty products.
  • An increasing proportion of the population is entering the private healthcare market.
  • The increasing use of generic medicines will continue to make healthcare more affordable.
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Capacity to expand

Capacity to expand convenient retail footprint and pharmacy network

  • The goal is to expand the Clicks store base in South Africa to 900 in the long-term, with a pharmacy operating in every store.
  • The retail pharmacy market share goal is 30% in the long term.
  • Primary care clinics in Clicks stores support the health service offering.
  • The retail footprint is complemented by an online store and a national pharmacy delivery service model to increase customer convenience.
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Differentiated product offer

Differentiated product offer

  • Private label and exclusive brands offer differentiated ranges at higher margins.
  • Clicks is a brand that consumers trust and the brand has demonstrated it can transcend product categories and markets.
  • Exclusive franchise brands, The Body Shop, Claire’s, GNC and Sorbet, augment Clicks’ private label brands in the health and beauty categories.
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Leveraging customer engagement

Leveraging customer engagement

  • Clicks ClubCard is one of the largest retail loyalty programmes in South Africa with 7.8 million active members.
  • ClubCard offers customers attractive and convenient cashback rewards and a range of affinity partner benefits.
  • Clicks has extensive opportunities to use digital engagement through the Clicks ClubCard, website, online store and the Clicks app to personalise communication to increase the customer basket size and value, and frequency of shopping.
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Opportunity to grow UPD

Opportunity to grow UPD

  • UPD provides an efficient healthcare supply chain which supports the growth of the Clicks business.
  • UPD offers national wholesale services to private hospitals and independent pharmacies, including Link pharmacies.
  • The business offers a distribution service to local and international pharmaceutical manufacturers based on price, quality control and speed to market.
  • The growth opportunity for the business is evident in the goal of obtaining a 30% share of the fine wholesale and bulk distribution markets.
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