Managing stakeholder engagement
Clicks Group’s stakeholder engagement strategy focuses mainly on the five primary stakeholders that management believes are most likely to impact on the delivery of the group’s strategic objectives and influence the ability to create value in the short, medium and long term. Proactive and transparent relationships enable the group to identify and address the needs, expectations and concerns of these stakeholder groups.
Shareholders and lending institutions
Shareholders:
Local and international institutional and private investors, as well as fund managers and analysts from the broader investment community.
Lending institutions:
South African financial institutions which provide funding and trade finance facilities to the group.
Key engagement issues in 2025
Addressing engagement needs, expectations and concerns
Macroeconomic environment
Concerns regarding the macroeconomic outlook for South Africa. Key issues include persistently low economic growth, high unemployment and fiscal constraints, which all contribute to an uncertain investment environment and may impact long-term value creation.
Concerns regarding the macroeconomic outlook for South Africa. Key issues include persistently low economic growth, high unemployment and fiscal constraints, which all contribute to an uncertain investment environment and may impact long-term value creation.
The South African economy continues to experience below-potential growth, with job creation remaining insufficient to address structural unemployment challenges. However, the South African Reserve Bank’s inflation-targeting policy, aimed at maintaining inflation near the lower end of its target range, has provided some relief to consumers. This, coupled with a gradual reduction in interest rates, has supported household spending and contributed to a more stable consumer environment.
Impact of trade tariffs on supply chain
The potential impact of increased tariffs on exports to the USA on global supply chain and consumer spend.
The potential impact of increased tariffs on exports to the USA on global supply chain and consumer spend.
The increased tariffs imposed on South African exports to the USA present a risk to employment, particularly in sectors exposed to international trade, and consumer spending. Despite this, the evolving global trade landscape has created opportunities to diversify sourcing strategies. The uncertainty surrounding future tariff increases has prompted engagement with suppliers in non-traditional regions, potentially improving procurement terms and enhancing supply chain resilience.
Clicks: Long-term space growth
Concerns raised regarding the longer-term availability of retail space to support continued expansion and whether returns on new stores are deteriorating.
Concerns raised regarding the longer-term availability of retail space to support continued expansion and whether returns on new stores are deteriorating.
There are still many suitable existing shopping centres that Clicks is targeting for locations as well as opportunities in new malls being built in lower-income areas. Currently, approximately 53.2% of the population lives within five kilometres of a Clicks pharmacy, highlighting the substantial potential for further expansion. The performance metrics for recently opened stores are consistent with historical data.
Clicks: Retail systems rollout
Given the challenges experienced during the UPD systems implementation, shareholders have sought assurance that the retail systems rollout will be executed more effectively.
Given the challenges experienced during the UPD systems implementation, shareholders have sought assurance that the retail systems rollout will be executed more effectively.
The retail systems upgrades in Clicks differ fundamentally from the systems implementation undertaken at UPD. The new warehouse management system (WMS) has undergone extensive testing and rollout in the dark store which is used for the omni-channel business.
UPD: Wholesale market share
Reasons for the ongoing decline in UPD’s wholesale market share.
Reasons for the ongoing decline in UPD’s wholesale market share.
UPD’s wholesale market share in value terms has been impacted by a sustained shift among private hospital customers to lower-priced generic medicines. While sales to hospitals grew by 1.4%, volumes increased by 8.8%. In the past year the market share was further impacted by Clicks not being able to apply for new pharmacy licences for a period of 18 months in 2023 through 2024 which constrained the expansion of the pharmacy network and limited wholesale distribution volumes.
Customers
Clicks
primarily targets consumers in the growing middle to upper-income markets (LSM 6 – 10).
UPD
customers include Clicks, major private hospital groups, pharmaceutical manufacturers and independent pharmacies.
Key engagement issues in 2025
Addressing engagement needs, expectations and concerns
Customer financial pressure
Supporting customers facing sustained financial strain in a constrained economic environment.
Supporting customers facing sustained financial strain in a constrained economic environment.
The group remained focused on delivering affordability and value through competitive pricing, targeted promotions and the loyalty benefits of the Clicks ClubCard, which accounted for 82.6% of sales in Clicks. These initiatives helped alleviate pressure on household budgets while sustaining customer loyalty and spend.
Service and promotional execution
Meeting customer expectations for consistent service quality and reliable promotional delivery across stores.
Meeting customer expectations for consistent service quality and reliable promotional delivery across stores.
The group sharpened its focus on operational execution across the retail network, improving service consistency and ensuring reliable delivery of promotions. These efforts enhanced the customer experience, supported retention and underpinned Clicks’ reputation as a trusted, value-driven retailer.
Targeted engagement in customer segments
Expanding relevance and engagement across underrepresented customer groups.
Expanding relevance and engagement across underrepresented customer groups.
The group advanced its structured approach to customer segmentation, with particular focus on enhancing engagement with underrepresented segments such as male consumers. Insights from customer behaviour, loyalty data and market research informed tailored product ranges, marketing initiatives and engagement strategies designed to strengthen brand relevance, broaden appeal and capture growth opportunities across diverse customer demographics.
Employees
All permanent and part-time employees across the group.
Key engagement issues in 2025
Addressing engagement needs, expectations and concerns
Employee well-being
Enhancing the group’s holistic wellness offering with a particular focus on alleviating financial pressures.
Enhancing the group’s holistic wellness offering with a particular focus on alleviating financial pressures.
The group advanced its holistic wellness framework with an increased emphasis on financial well-being, recognising its link to mental and physical health. Strategic partnerships with three major banks and fitness providers enabled employees to access preferential borrowing and savings rates, delivering tangible financial benefits to employees.
These initiatives complemented existing physical and mental wellness programmes, supporting employee resilience and overall quality of life.
Employee engagement
Fostering an engaged workforce and ensuring follow-through on employee feedback.
Fostering an engaged workforce and ensuring follow-through on employee feedback.
The 2025 engagement survey achieved an industry-leading participation rate of 86%, with results showing 40% of employees actively engaged and only 2% actively disengaged. Action planning is under way at group, business unit and team levels, using a co-creation approach to ensure employees directly shape initiatives aimed at strengthening workplace culture and performance.
Labour relations and communication
Maintaining constructive relations and transparent dialogue with organised labour.
Maintaining constructive relations and transparent dialogue with organised labour.
Constructive labour relations remained a priority. Regular town hall meetings provided consistent opportunities for open dialogue between leadership and employees. Ongoing engagements with recognised trade unions, the
South African Commercial Catering and Allied Workers Union (SACCAWU) and the National Union of Public Service and Allied Workers (NUPSAW), supported alignment on workplace matters, promoted workplace stability, and ensured compliance with evolving legislation and the development of the group’s new five-year employment equity plan.
Suppliers
Local and international suppliers of products and services, including producers of exclusive brands and private label products.
Key engagement issues in 2025
Addressing engagement needs, expectations and concerns
Supplier performance and inventory management
Ensuring consistent product availability and optimising supply chain efficiency.
Ensuring consistent product availability and optimising supply chain efficiency.
Minimum Display Quantity (MDQ) performance remained above 95%, supported by improved forecasting, enhanced supplier infill and streamlined process management. These measures contributed to sustained product availability and operational reliability across the store network. The MDQ measure has improved significantly as a result of the implementation of new supply chain systems several years ago.
Enterprise and supplier development
Promoting inclusive economic participation and strengthening supplier capabilities.
Promoting inclusive economic participation and strengthening supplier capabilities.
The group relaunched the UPD owner driver scheme in February 2025, enabling small business participation in the logistics value chain. This initiative supports enterprise and supplier development objectives, enhances service delivery and contributes to inclusive growth. In addition, the group has taken the opportunity with the implementation to roll out an electric vehicle fleet further supporting the group’s environmental targets. The programme received positive media coverage, reinforcing its strategic impact.
Government and industry regulators
The Department of Health, South African Revenue Service and other government departments, industry regulatory bodies and local authorities. As a listed company, the JSE Limited is the primary regulator.
Key engagement issues in 2025
Addressing engagement needs, expectations and concerns
Alignment of the Department of Trade Industry and Equity Equivalent (EE) Programme with national transformation and empowerment objectives.
Management engaged with the Minister of Trade, Industry and Competition
in November 2024 during a board meeting of the Consumer Goods Council
of South Africa to present its case for the introduction of an equity equivalent programme applicable to South African companies with majority foreign shareholding. This engagement reinforced the group’s commitment to
aligning with national transformation priorities and addressing stakeholder expectations for inclusive economic participation through transparent and collaborative dialogue.
Responding to changes in the legal and regulatory framework.
The group remains committed to staying abreast of changes in the legal and regulatory landscape, and responds timeously to ensure operational readiness and contributing meaningfully to policy development. Reflecting its proactive approach to regulatory engagement and stakeholder responsiveness, in March 2025 the group submitted comments to the Competition Commission on the Draft Interim Block Exemption for Healthcare Tariffs.
Managing complaints and meeting expectations for product quality, ethical advertising and third-party service reliability.
The group adopts a proactive approach to complaint resolution, addressing six cases during the reporting period: five were submitted to the Consumer Goods and Services Ombud and one through the Advertising Regulatory Board. The cases related to product quality, service delivery and advertising standards, confirming the group’s commitment to consumer protection and responsible business conduct.