South Africa’s biggest pharmacy retailers are redesigning how and where they grow. With suburban shopping centres offering fewer new sites, South African pharmacy chains are moving beyond the familiar middle- and upper-income customer base that has fuelled expansion for years. Clicks and Dis-Chem still dominate the dispensary market, but both groups now face a tougher question: where does the next phase of growth come from?
A key part of the answer sits in areas where large chains have had limited presence. Township retail is increasingly viewed as a major opportunity, with Standard Bank estimating the market at roughly R900bn a year. Yet many townships and lower-income areas still have relatively few stores from the major pharmacy brands. That gap is becoming more visible as rivals move faster, especially Shoprite’s Medirite, which is building healthcare access into everyday shopping trips.
South Africa Pharmacy Chains Seek Growth Beyond Saturated Suburbs
Clicks and Dis-Chem have historically competed in similar retail nodes. That has concentrated their networks around established malls and suburban centres. As those locations mature, store rollouts become harder to justify, and the risk of cannibalisation rises.
At the same time, Medirite is using an advantage the specialists do not have at scale: existing supermarket foot traffic. Placing pharmacies and smart clinics inside or near Shoprite and Checkers meets customers where they already shop. Convenience and value are powerful in primary care, especially when linked to repeat prescriptions and affordable services.
Clicks Tests Smaller Stores For Township Customers
Clicks is taking a format-led approach to unlock harder-to-reach markets. It is developing smaller stores, sized between 150m² and 300m², compared with the group’s traditional 550m² to 650m² footprint. Chief executive Bertina Engelbrecht says space is a major constraint in areas such as Alexandra, Soweto and parts of the Western Cape, where landlords often offer smaller sites than Clicks has historically required.
The proposed model leans into high-rotation categories. Expect baby, health, personal care and everyday essentials to lead the range. Clicks also plans more private-label options and smaller pack sizes to support affordability. Extended trading hours are part of the design, aimed at customers who return home after 6 pm.
The chain is also looking at service innovation. In some stores, virtual doctor and clinic services may replace a full dispensary, as employing a pharmacist could weaken the economics of a smaller outlet. Ten pilot stores are planned for the current financial year.
Dis-Chem Builds Healthcare-Led Destination Stores
Dis-Chem is going bigger on healthcare, but tighter on space efficiency. Its new Melrose Arch Health Hub is positioned as a destination rather than a traditional pharmacy. It combines a pharmacy with clinic services, virtual doctor access, diagnostics, script submissions, and digital queueing. It also includes financial services such as medical, funeral and life cover.
At just over 800m², the hub is smaller than Dis-Chem’s typical 1,300m² stores, but it is designed to deliver more services per square metre. From August, the group expects all new stores to follow this model, signalling a shift towards standardised, health-led sites.
Investors Track Margins, Formats, and Rollout Discipline
The sector remains attractive because demand is resilient and prescriptions generate repeat revenue. Investors will watch whether new models protect margins while expanding the addressable market. Clicks has delivered steady growth off a strong core format and newer healthcare concepts such as UniCare. Dis-Chem is pushing for stronger margins and faster store growth from a smaller base.
The next battleground is clear. South African pharmacy chains are no longer just competing for prime suburban space. They are competing on access, convenience, and credible primary care in the communities where the next decade of retail healthcare growth may be won.
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