R5 billion in five years: say goodbye to Dis-Chem as you know it

Dis-Chem continued its aggressive expansion strategy in the 2026 financial year as the group seeks to transition from a pharmacy retailer to an integrated healthcare provider.

This has seen the company spend a total of R5 billion on capital expenditure over the past five financial years.

This spending has included aggressive retail expansion, the acquisition of independent pharmacies, and the scaling up of massive distribution and supply chain centres.

Dis-Chem released its latest results for the 2026 financial year on Friday, 29 May, which revealed a mixed performance.

The group’s revenue from contracts with customers rose by more than 9% to R42.83 billion, while its cost of sales grew by 10% to R33.42 billion.

Steep increases in depreciation costs and amortisation expenses led to a surge in Dis-Chem’s “other expenses” category to R11.35 billion, a 13% increase from 2025.

This rise in expenses was coupled with losses in Dis-Chem Life’s Joint Venture, as the group’s new foray into the life insurance sector proved costly in the short-term.

The joint venture generated a comprehensive loss of R100.37 million in 2026, and Dis-Chem had to absorb its 50% share, which amounted to a R50.19 million hit.

Compounded by higher finance costs of R554 million and acquisition expenses, these factors saw Dis-Chem’s total profit for the year decline by 15.06% to R1.04 billion.

Dis-Chem’s basic earnings per share also fell by 15.06% to 114.2 cents.

These results come on the back of a busy year for Dis-Chem, in which it continued its aggressive expansion strategy and launched an overhauled version of its loyalty programme, now named Better Rewards.

The group also launched its in-house innovation and technology hub, X, bigly labs in November 2025, which is tasked with transforming Dis-Chem’s retail and healthcare offerings.

“The group generated strong revenue performance in an environment where the consumer continued to be financially constrained, while improving total income margin and gaining market share across all core retail categories,” CEO Rui Morais said. 

“Following the front-loaded investments in X, bigly labs, proof points include the launch of Better Rewards, a new analytically led promotional engine, and a new Health Hub store format that empowers operations to enable lower-cost and greater-access healthcare delivery.” 

“These investments serve to evolve the group from retail pharmacy to integrated healthcare provider and continue to reinforce the importance of data-led retailing.”

Capex boom

Looking back over the past five financial years, Dis-Chem has followed a multi-pronged approach to expansion, including acquisitions, strategic diversification, and significant supply chain scale-ups.

One of the core pillars of Dis-Chem’s growth has been the continuous buyout of independent pharmacies, which has served to rapidly increase its retail footprint.

In 2022, the group acquired several independent pharmacies, including Ferngate, Northlands, and Howick. That same year, it completed a 100% buyout of the Pure Pharmacy Group.

In the year that followed, Dis-Chem expanded its footprint in the maternity category by acquiring the Baby Boom specialised baby store group, and also added the independent pharmacy Westville Junction.

In the 2024 financial year, when Morais took over as CEO from founder Ivan Saltzman, Dis-Chem acquired B Anderson and Delta Blue.

The year after saw a pause, with Dis-Chem making no new acquisitions. However, in 2026, the group’s expansion continued with the acquisition of I Watson.

The group has also significantly scaled up its logistics and supply chain investments over the past five years, starting with the acquisition of its CT Distribution Centre, KZN Warehouse and Eleadora in 2022 for R217 million.

In 2023, it made a monumental property investment by acquiring a 63,000 m² distribution centre in Gauteng for R502 million.

Two years later, the group further consolidated its property portfolio by acquiring Columbia Falls Properties 7 for R519 million. This acquisition secured the property that houses the group’s Midrand distribution centre and head office.

Over the same five-year period, Dis-Chem pivoted beyond traditional retail pharmacy by investing in primary healthcare services and life insurance.

This aggressive expansion strategy came at a cost, with Dis-Chem having spent a total of R5 billion on capital expenditure over the past five financial years.

However, this strategy has also served to increase Dis-Chem’s revenue significantly over the period, going from R30.4 billion in 2022 to R42.8 billion in 2026.

The group has also been able to significantly scale up its supply chain capacity, with the 2023 acquisition alone increasing its warehouse capacity by 75%.

To fund further growth over the coming years, Dis-Chem took out an additional R500 million bullet loan with a two-year maturity date, which can be extended to three years.

Dis-Chem’s aggressive expansion plans are only set to continue in the coming years as the group rolls out its new store format, unveiled in early May 2026, and revamps its existing base.

Morais believes these investments will serve to take Dis-Chem to the next level, extending beyond the traditional retail pharmacy model.

“Our ecosystem investments are aimed at transitioning the group from a pharmacy retailer to an integrated healthcare provider by positioning Dis-Chem as South Africa’s go-to health authority with the purpose of increasing access to and reducing the cost of care,” Morais said. 

“We are creating an ecosystem that positions the group to play the dual role of healthcare provider and funder, using an innovative operating model to reimagine and disrupt the way South Africans access healthcare.” 

“At the same time, we are strengthening healthcare delivery across both products and services, creating a defensive moat that secures the traditional retail basket in an ever-increasing competitive environment.”