The cold hard truth of South African retail is that if you aren’t gaining market share, you’re losing it. This is the arena where Clicks and Dis-Chem are now waging their fiercest battle in years.
As Clicks CEO Bertina Engelbrecht recently put it during a results presentation: “The past six months have been tough. Trading conditions remain constrained, especially for middle-income households. Competition intensified … traditional players extended into health and beauty categories, bringing heightened levels of promotions aimed at capturing a greater share of the consumer’s wallet.”
That intensity is visible in the numbers.
Based on Clicks’s interim results for the six months to February 2026 and Dis-Chem’s trading update for the 24 weeks to the same period, the prescription for growth now runs through data-driven loyalty schemes, aggressive promotions and a pharmacy-led defence of margins.
On the surface, Dis-Chem is winning the top-line sprint.
The group recorded 10.1% group revenue growth (to roughly R24.4bn annualised), outpacing Clicks’s 7.4% turnover growth (R24.9bn). However, Clicks maintains the crown in profitability, posting a trading margin of 9.1% and headline earnings of R1.53bn, up 6.4%. Dis-Chem’s full profit picture remains unclear until its official results are released on May 29, but its trading update reveals a business leaning heavily into selling more products — not necessarily more expensive ones.
The loyalty war: R410m in cash-back vs R2.3bn returns
The biggest shift is in how these rivals are driving shopping frequency — by aggressively marketing their loyalty programmes to get customers using them more often.
Dis-Chem’s “Better Rewards” programme, launched in October 2025, is a game-changer. In just 17 weeks, the group returned R410m in savings directly to customers. CEO Rui Morais sees the savings as money put back into customers’ wallets and health. But a competitor might see it differently: those savings are effectively the same as slashing prices and a direct attack on their market share.
Dis-Chem reported that participating brands in its loyalty programme saw volume growth of 20.9% and revenue growth of 19.4%. Perhaps more striking is that 550,000 shoppers who had avoided Dis-Chem for a year came back. This is a direct assault on Clicks’s historical loyalty stronghold.
Clicks is not standing still.
The numbers at Clicks tell two stories. Loyalty is strong: 12.9-million active ClubCard members contributed 83.7% of sales and received R527m in cashback. But a warehouse management system failure in the Western Cape cost R175m in lost sales. Rather than retreat, Clicks returned R2.3bn to shareholders — a signal of confidence that contrasts sharply with Dis-Chem’s focus on instantaneous “boosts” (targeted discounts activated via its app to drive immediate purchases).
Pharmacy: the GLP-1 gold rush
Both groups are leaning heavily on the dispensary.
At Clicks, pharmacy sales grew 8.6%, pushing its retail pharmacy market share to 24.9% (up from 24.2%). At Dis-Chem, pharmacy revenue jumped 13.7%, explicitly driven by “high demand for GLP-1 drugs” (the blockbuster weight-loss and diabetes medicines). Historically, Dis-Chem has managed to keep its retail pharmacy market share at roughly 25%.
This is where competition gets clinical. As margins shrink on private label and front-shop goods, the pharmacy dispensary remains the reliable profit driver. Dis-Chem is using the pharmacy to “boost engagement” with customers within its loyalty app to steer their medicine scripts away from competitors, while Clicks is aggressively expanding its pharmacy network to 797 outlets.
Inflation, discounting and the ‘halo effect’
The broader economic environment is forcing a price war. Internal selling price inflation at Clicks is just 2%, below the CPI of 3%, meaning the group is actively absorbing cost increases. Dis-Chem, meanwhile, boasts that its “always-on, health-relevant, lowest price basket” is driving shopping frequency.
A Joburg-based analyst says aggressive discounting from Clicks and Dis-Chem will “remain the status quo as this sector is pretty much mature”. When South Africa opened up its pharmacy market to corporate ownership in 2003, Dis-Chem and Clicks moved fast. They now dominate nearly 50% of the dispensary market, leaving many independent pharmacies in their wake.
Notably, Dis-Chem admits that even brands not participating in the Better Rewards programme are benefiting from the “halo effect” of increased shopper trips and store traffic. This suggests a fundamental shift: consumers are no longer loyal to a store brand but to the best value proposition in the moment.
NielsenIQ data for the 12 weeks ended January 2026 underlines the aggression: Dis-Chem achieved volume growth of 8% against a market of 1.3%, taking share across all core categories by 0.8 percentage points. Clicks, despite its woes regarding the warehouse management system failure in the Western Cape, still grew comparable store turnover by 3.1%.
Store rollouts: the battle for foot count
Both companies are expanding aggressively, indicating that physical presence remains key to defensive strategy.
Clicks opened its 1,000th store and is now operating 1,075 stores (including The Body Shop and Sorbet). It plans 40-50 new stores and 40-50 new pharmacies in FY2026, piloting 10 differentiated concept stores.
Meanwhile, Dis-Chem operates 355 retail stores (313 pharmacies and 42 Baby City). While its retail store growth appears more measured, its wholesale arm (Dis-Chem also sells products to other pharmacies — not just its own stores) is exploding, with external wholesale revenue up 13.7%. Dis-Chem’s The Local Choice (TLC) franchise network surged to 281 stores (from 230 a year ago), while sales to independent pharmacies grew 13.4% — suggesting Dis-Chem is aggressively expanding its wholesale reach beyond its own walls.
Dis-Chem’s store expansion goals (doubling store base by 2030), market share growth and its consistent revenue growth have piqued the interest of Allan Gray, which now owns more than 10% of the retailer.
On why Allan Gray favours the retail pharmacy model and, in particular, Dis-Chem over Clicks, the investment house’s analyst Jonty Fish says: “Pharmacy sales are generally resilient through economic cycles. Medicine is nondiscretionary, and consumers are unlikely to reduce essential health-care spending even when under pressure.
“The front shop further enhances defensiveness, with a significant portion of sales coming from staple categories such as personal care, hygiene and cleaning products. This combination results in earnings that are more stable than those of many other retail formats.”
Clicks remains the profit king, with a 45.7% return on equity and a diversified distribution business (UPD) that grew 13%, albeit constrained by contract losses. However, Dis-Chem is the momentum player. Its 10.1% revenue growth, the viral success of Better Rewards and its ability to add 550,000 new shoppers suggest it is currently winning the war for new wallets.
