SA Consumer: Pharmacy reWARds: instant value disrupts duopoly

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SA Consumer: Pharmacy reWARds: instant value disrupts duopoly

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SA Consumer

Pharmacy reWARds: instant value disrupts

duopoly

Rating Change

Structural shift: price perception & loyalty reset duopoly 22 June 2026

Dis-Chem’s Better Rewards marks a structural shift in SA pharmacy retail, moving

Equitycompetition from deferred loyalty to immediate, visible value. On a like-for-like basket,

South AfricaDis-Chem is c6% cheaper upfront vs Clicks on front-shop items, with rewards that are

Consumerinstant, transparent and easy to access. In our view, this materially shifts customer price

perception and necessitates a strategic response from Clicks. Encouragingly, we believe Michael Jacks, CFA >>

Clicks has the means to respond, supported by a broadly equivalent - albeit less visible - Research Analyst Merrill Lynch (South Africa)

value proposition and strong financials. +27 113 055 158

michael.jacks@bofa.com

Disruptor #1: rewards become instant & more visible Jameel Bakhsh, CFA >>

Dis-Chem’s base discount and stackable boosts deliver a compelling value proposition ResearchMerrill LynchAnalyst(DIFC)

that resonates in a high-cost environment. We believe three key features are driving jameel.bakhsh@bofa.com

customer resonance: 1) transparency: savings are clearly visible at point of sale; 2)

immediacy: discounts are applied upfront; and 3) low friction: minimal customer action is

required to unlock value. In our view, once consumers anchor to immediate savings, the

Clicks: Key Changes

perceived value of deferred cashback declines structurally.

(ZAR) Previous Current

Disruptor #2: store experience the second battleground Price Obj. 396.00 301.00

Dis-Chem’s “store of the future” represents a step-change in customer experience, 2026E EPS 14.57 14.53