Beauty and pharmacare retailer Clicks says its private label products contributed nearly R5bn to overall half-year sales driven by value, quality and local production.
Many of these products are made in SA, which helps to support job creation and economic growth, CEO Bertina Engelbrecht said.
The group reported that its private label product sales increased 10.1%, making up 31.4% of front-shop sales.
Clicks’ private label range includes brands such as Payless, Safeway, Made4Baby, SunProtect and Xtreme. Products such as nappies, toilet paper, beauty creams, electrical items and even snacks have seen high sales during the period in review.
Engelbrecht said in many of those categories, Clicks’ private label items had established strong market positions, outperforming big name competitors.
Beyond the local market, Engelbrecht disclosed that Clicks had been approached by potential international partners interested in its private label portfolio. While still in the exploratory phase, the company was considering opportunities to expand into export markets, wholesale and online-exclusive channels.
Any move outside of SA would be done cautiously and in full compliance with international regulations, she said.
The group is also seeing fast growth in its digital sales channels, with more than 800,000 app downloads recorded for the interim period. The online sales have increased by 23%, with the company planning to further invest in digital tools to improve personalisation, promotions and customer experience.
The group on Wednesday reported an increase in half-year earnings boosted by market share gains in the health and beauty segments, stronger private label performance and better margins.
Headline earnings per share increased 13.2% to 604c.
Group turnover rose 6.2% to R23.2bn, with retail turnover, including Clicks, The Body Shop, M-Kem and Sorbet up 6.4%.
The group reported an 8.9% increase in total income, while the total income margin expanded by 80 basis points to 31%. Group trading profit climbed 12.6%, lifting the trading margin to 9.1%.
Clicks declared an interim dividend of 238c per share.
Clicks said it anticipated a challenging trading environment in the second half, driven by the upcoming VAT hike and global economic uncertainties. Nevertheless, Clicks reaffirmed its commitment to expansion, targeting 45 to 55 new stores and pharmacies by year-end, and advancing towards its medium-term goal of 1,200 stores nationwide.
According to Engelbrecht, store proximity was critical to Clicks’ healthcare strategy, ensuring customers had easy access to health services and advice.
“We remain confident in the group’s competitive advantage and market-leading positions in the health and beauty sectors, as well as the long-term organic growth opportunities in Clicks. We are forecasting an increase of 11%-16% in diluted HEPS for the 2025 financial year,” Engelbrecht said.
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