Medication sales show divide as new retail patterns emerge
South Africans in the middle- to upper-income bracket - a core part of Dis-Chem's customer base - are collecting medication more frequently, with the retailer reporting a 25% improvement in chronic medication adherence rates among its customers. Following the release of its year-to-end-February results on Wednesday, Dis-Chem financial director Rui Morais said that before Covid-19, customers on chronic medication for diseases such as diabetes would on average collect medicine 6.4 times in a 12-month cycle. Since Covid cases started appearing in SA in March, this has increased significantly; if extrapolated over a year, it would equate to eight collections over a 12-month period. Morais attributed this increase to more awareness among customers about how Covid-19 can have severe effects on people living with co-morbidities such as diabetes or hypertension. He said customers havebeen using delivery channels or placing orders and coming in to collect.However, although there is increasing adherence in the private sector as middle- to upper-income South Africans have easier access to pharmacies and delivery options, in the public health sector consumers appear to be finding the collection of medication more difficult. TimesLIVE reported this week that the health department in Gauteng is trying to trace thousands of TB and HIV-positive patients who have not collected their medication since the lockdown started in late March. The department said that since the lockdown the average percentage reduction in medicine collections for TB has been 1.4% and 19.6% for HIV. Health-conscious middle-class consumers have boosted demand for Dis-Chem's nutritional products, said Morais. "We have seen high growth in immune boosters and in all of the preventative-medicine type categories. Even across the poorly traded April period when we had [lockdown] level 5, we are probably 15% ahead of target on vitamin and nutritional supplement sales." He said vitamin C sales had "shot the lights out" since the beginning of March. Morais said he believes this buying pattern is likely to be sustainable. "Consumers will invest more in health care. I think you will see health care take a greater share of that consumer wallet."Dis-Chem is also traditionally frequented by customers seeking cosmetics and fragrances. Referring to the Lipstick Effect, which suggests people splash out on small luxury items such as lipstick during difficult economic times, Morais said it's "too early to tell" whether there are any specific trading patterns because "we were only able to sell some of these items under level 4". "We anticipate that as the economy opens up and people engage with each other, albeit in a different way, there's going to be a bigger need for colour cosmetics and for fragrances. That segment was very subdued as a function of not being able to sell these products under level 5."For other retailers, the closure of restaurants and hair and beauty salons may be behind increased sales of meat, fresh produce and personal care products.Spar, which released half-year results to end-March on Thursday, said there was a 20% increase in the sale of personal care products, which include health and beauty merchandise, in April. Sales of fresh fruit and vegetables were up 25% for the same month, it said, and its butchery division increased sales 7% in that period. Spar CEO Graham O'Connor said the group's supply chain has remained robust during lockdown, but that there are price inflation risks "where raw materials are imported and especially some of the packaging elements relating to that". "Suppliers have highlighted to us that price increases will be coming through. We will try and fend off [the increases] as much as we can until such time as we can't any longer." O'Connor said his biggest worry is unemployment "and the fact that businesses are still closed". "The sooner we get back to work the better because to create jobs is very difficult as we know, so we need to first retain jobs before we can create jobs. "That is probably the biggest issue for me and I have major concern about that. Allied to that is the safety of our people and making sure we follow [hygiene and health protocols to prevent the spread of Covid-19]."