31 July 2008

Release Date: 2008/07/31

Health and beauty retail specialist Clicks continues to entrench its position as the country’s largest retail pharmacy chain and opened its 150th pharmacy at the Hyde Park shopping centre in Johannesburg today.

Following the opening of South Africa’s first corporate retail pharmacy in Cape Town in March 2004, Clicks has followed a prudent growth strategy as it pioneered corporate retail pharmacy in the face of several challenges, opening its 100th in-store dispensary in July 2006 and the 150th in July 2008.

New Clicks group chief executive, David Kneale, said the corporate pharmacy model adopted by Clicks has been proven internationally by large retailers such as Boots (UK, Europe and Asia), Walgreens (USA), CVS Caremark (USA) and Shoppers Drug Mart (Canada).

“Corporate pharmacy in South Africa has grown to an estimated 22% share of the retail pharmacy market in a mere four years. While this is still some way off the levels of the USA (62%) and UK (53%), this highlights the growth opportunity for corporates within the local market.”

Clicks has a vision to open a dispensary in every store, which provides the potential for opening as many as 350 pharmacies in the medium- to long term.

Kneale said the drugstore model was based on roughly 30% of turnover being generated by the dispensary and 70% on front shop sales. “The dispensary is a mechanism to drive foot traffic into stores and this increases front shop and OTC medicine volumes. Currently Clicks stores with dispensaries are growing turnover at almost three times the rate of stores without dispensaries.”

Corporate pharmacy has several advantages over individual, privately-owned pharmacies, according to Kneale. “Large pharmacy chains are able to undertake health education on a national scale owing to their extensive footprint, offer better value to customers and provide standardised patient care.”

An example of this is the centralised patient registry introduced last year enabling Clicks ClubCard customers to access their patient records and prescription medication at any Clicks pharmacy across the country. Clicks already has over 750 000 customer profiles captured on this national database.

Michael Harvey, managing director of Clicks, said the retailer’s strategy has always been aligned with Government’s objective of making medicine more affordable and accessible to consumers across the country, and improving the efficiency and quality of healthcare delivery.

Most Clicks in-store pharmacies also offer primary healthcare clinics, with services including basic medical advice, injections, simple health checks as well as medical and HIV/AIDS counselling.

Clicks is the largest employer in the retail pharmacy sector, with over 360 pharmacists, 380 pharmacy assistants and over 90 nurses servicing customers across its national network.

Harvey said the availability of pharmacists remains a challenge and Clicks is committed to building capacity for the long-term sustainability of the pharmacy profession.

“We are working closely with universities to develop talent and also provide continuing professional development for our own pharmacists. Clicks has recognised the critical role that can be played by pharmacy assistants in helping to alleviate the shortage of professionally trained pharmacists,” he said.

The Clicks Pharmacy Healthcare Academy, which was established in 2003, has trained 772 pharmacy assistants for Clicks and for external bodies, including the Department of Health in the Free State and Western Cape.

Clicks pharmacies were recently rated as the first choice among South African health and beauty consumers in an AC Nielsen survey, with spontaneous awareness levels of Clicks pharmacy measured at 56%.

Issued by Tier 1 Investor Relations on behalf of the Clicks Group
For further information kindly contact
Graeme Lillie, Tier 1 Investor Relations 021 702 3102 / 082 468 1507

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