Group strategy

Creating sustainable long-term shareholder value through a retail-led health, beauty and wellness offering.

Group strategic objectives
1
Increase customer appeal and access through the expansion of the store, pharmacy and online presence.
2
Accelerate market share gains in pharmacy and core front shop categories.
3
Strengthen UPD’s national pharmaceutical wholesale and distribution services to grow profitable market share.
4
Achieve operational excellence with an efficient, centralised supply chain.
5
Build an inclusive, transformed company with a strong talent pipeline to support sustainable growth.
6
Promote sustainability through efficient cash and capital management and entrench robust environmental, social and governance practices.
Strategic drivers of longer-term growth
These strategic drivers of longer-term organic growth should ensure continued competitive advantage in the health and beauty markets in which the group operates.
Favourable market dynamics
  • South Africa’s healthcare sector remains defensive and offers long-term growth opportunities.
  • Rising living standards, increasing urbanisation and longer life expectancy are driving demand for health and beauty products.
  • Greater use of generic medicines is improving access to affordable healthcare.
Convenience
  • Clicks aims to expand its store base to over 1 200 outlets in the medium term, with a pharmacy operating in every store in South Africa.
  • Accelerate the new store and pharmacy opening programme and develop new pharmacy and retail formats to drive growth, including the rollout of a specialised 24-hour pharmacy model.
  • The long-term goal is to achieve a 30% market share in retail pharmacy.
  • Expansion of the Clicks Baby store-in-store presence to capitalise on the growth in this strategic category.
  • Extend store base outside South Africa and evaluate potential opportunities in other southern African markets.
  • Customer convenience is supported through an online store and a national pharmacy delivery service.
Differentiation
  • As a value retailer, Clicks is committed to maintaining price competitiveness with the national retail chains.
  • Private label and exclusive brands offer differentiated product ranges at higher margins.
  • The Clicks brand is trusted by consumers and has a proven ability to transcend product categories and markets.
  • Exclusive franchise brands The Body Shop and Sorbet complement the Clicks private label health and beauty portfolio.
  • Sorbet beauty salon franchise chain and an equity investment in premium beauty brand retailer ARC stores further differentiates the market offering.
Personalisation
  • Clicks ClubCard is one of the largest retail loyalty programmes in South Africa, with 12.6 million active members.
  • ClubCard provides customers with generous and convenient cashback rewards and an increasing range of reward partner benefits.
  • Migrating ClubCard members to the Clicks mobile app supports the personalisation strategy.
  • The ClubCard, website, online store and mobile app create opportunities to leverage personalised digital engagement.
Growth opportunities for UPD
  • UPD operates an efficient healthcare supply chain which supports the growth of the Clicks business.
  • UPD provides national wholesale services to private hospitals and independent pharmacies, including Link pharmacies.
  • The business also offers bulk distribution services to local and international pharmaceutical manufacturers, competing on price, quality control and speed to market.
  • The long-term goal is to achieve 35% market share in both wholesale pharmaceutical and bulk distribution markets.
Refer to investment case