Clicks will revamp its e-commerce platform to offer customers more convenience and capitalise on the growing demand for home delivery.
Although sales grew during the year, the retailer acknowledged that performance in the past years has been sluggish, with limited delivery options and lead times.
“Although sales grew 15.9%, we can and we will do better,” said CEO Albertina Engelbrecht.
CFO Gordon Traill said: “We recognised that we can do better in this area, so over the next 12 months we are going to be re-platforming our online system, both app and web.”
Focus will not be restricted to improving delivery but also on adding other functionalities.
In the year to August, Clicks expanded its market share across a number of categories, including baby products, skin care, hair care, and personal care.
“To grow our market share, we elevated our execution. Our performance and market share in skin care is not by accident; it is because of the way we have changed our customer journey by bringing skin care much more to the front of the store.”
Sean Culverwell, investment analyst at Anchor, said while Clicks continued to gain market share, with the exception of general merchandise and pharmacy, “it is worth noting that most of the group’s new pharmacy openings occurred in July and August, meaning the full benefit of these additions will only filter through in the coming period”.
Sales at the front store were lifted by a range of products, including sports and slimming products, body fresheners — with spritzers growing 44% — and private label or exclusive products for the group.
Engelbrecht said one in every three products sold in the front shop was a private label or exclusive product to Clicks. Clicks generated R9.7bn in private label sales and exclusive brands, contributing 25.9% of total sales.
The company is targeting a sales contribution of 35% from private label & exclusive brands in its front shop, up from 30.6%.
At its pharmacies, sales were driven by generic medication, and were up 8.8% to 59% of sales and 71% of volume. The 24-hour pharmacy UniCare, formerly M-Kem, grew on the implementation of after-hours doctor services and “exceptional performance” in primary health care, diabetes care and IV clinic, and diabetes primary care.
“We will be extending the UniCare format by two greenfield sites and two acquisitions by February next year. As with property, we are investing in skills required to accelerate the growth of this format,” Engelbrecht said.
Clicks has 990 stores and has set a target of opening its 1,000th store before the end of the year. In the medium term, it wants to have 1,200 stores.
It will spend R1.3bn in the 2026 financial year, with just over half of that going to opening new stores and refurbishments of existing ones. Currently, 53.2% of South Africa’s population lives within 5km of a Clicks pharmacy, highlighting the convenience of the pharmacy chain.
In our view, Clicks continues to stand out as a high-quality, defensive growth play in an otherwise challenging retail environment.
— Sean Culverwell, investment analyst at Anchor
Focus will also be on opening smaller formats Clicks stores in low-income areas.
Group turnover increased by 5.3% to R47.8bn, with retail turnover up 6% to R37.5bn.
Culverwell, investment analyst at Anchor, said Clicks once again demonstrated why it remains one of the highest-quality counters on the JSE, delivering strong earnings growth and returns on equity of 49%.
“Although revenue growth slowed in the second half, retail margins surprised to the upside, resulting in a sequential acceleration in earnings growth. Overall, earnings were broadly in line with our expectations but continue to highlight the group’s best-in-sector execution,” he said.
General merchandise, which includes electrical home appliances, had another disappointing year, with revenue down 5.5% to R5.6bn. It was hit by insufficient stock in the first half of the financial year, while the market had an oversupply of products.
Engelbrecht said work was underway to review some product ranges to improve the performance of the segment. “Over the last quarter, we were regaining market share,” she said.
Commenting on the outlook for Clicks, Culverwell said: “We remain constructive on Clicks’ outlook. The group is well-positioned to deliver another year of double-digit earnings growth in FY2026, supported by an acceleration in revenue growth.
“This will be underpinned by a strong pipeline of new store and pharmacy openings, and the full-year contribution from pharmacies launched late during FY2025.”
He said margins should remain well supported by growing private label penetration, while the group’s ongoing share buyback programme provides an additional tailwind to shareholder returns.
“In our view, Clicks continues to stand out as a high-quality, defensive growth play in an otherwise challenging retail environment.”
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