Retail

Dis-Chem sales suffer after “no-whites” policy

Dis-Chem CFO Rui Morais revealed that the group’s sales fell after its moratorium on hiring and promoting white people became public.

On 19 September, Dis-Chem CEO Ivan Saltzman released a letter which prohibited the appointment and promotion of white people.

Solidarity CEO Dirk Hermann published the letter on Twitter on 13 October, causing a backlash against Dis-Chem from politicians, business leaders, and the public.

Many high-profile South Africans called for a boycott of the pharmacy group, saying its anti-white policies have no place in South Africa.

Dis-Chem initially stood by its decision. It withdrew the “wording of the letter” but said its transformation intention, including a moratorium on the appointment of white people, remains.

“We have always been cognisant of the imperative to comply with all legislation, including employment equity, on our journey to meet transformation targets,” Dis-Chem said.

Dis-Chem’s refusal to withdraw its policy prompted Solidarity to take legal action against it for its decision to block the appointment and promotion of white people.

Solidarity argued that Dis-Chem goes beyond what the Employment Equity Act allows in terms of transformation.

Solidarity CEO Dirk Hermann

Last week, Dis-Chem backtracked on its moratorium on the appointment and promotion of white people following threats of a boycott and legal action.

The company said in a statement that there is “simply no ban on employing and promoting white individuals”.

It was the first time Dis-Chem said its moratorium on the appointment and promotion of white people had been withdrawn.

Clearly, the group had experienced a drop in sales, forcing it to backtrack on its no-whites position.

Dis-Chem CEO Rui Morais has now confirmed that sales declined following the publication of Saltzman’s letter and the subsequent social media storm.

“We have seen our growth trend reverse from 17 October to 24 October when looking at daily sales numbers following the leaking of the memo,” he said.

“That trend has now reversed back to normal following the pay cycle on 25 October.”

“It did have a short-term sales impact, and we are happy that we have clarified our position.”

He added that their intention was misrepresented and misunderstood in the market and how it played out on social media. “We have corrected our position on that,” he said.

Big price to pay

Sakeliga CEO Piet le Roux

Sakeliga CEO Piet le Roux said Dis-Chem CEO Ivan Saltzman’s memorandum showed the dangerous extent to which businesses can internalise the state’s race-based ideology.

“Dis-Chem’s memo shows how difficult it is to resist harmful state ideology and interference on your own,” he said.

“Even successful, publicly traded companies with vast consumer support and substantial legal resources succumb to state pressure.”

Like Solidarity, Sakeliga argued that Dis-Chem went above and beyond what legislation currently requires.

“Even when Dis-Chem backtracked under public pressure, it only did so by distancing itself from the tone of the CEO’s original memo, not its essence,” Le Roux said.

While the Dis-Chem CEO faced criticism over his decision and tone, his actions are partly a result of relentless pressure from the state to prioritise racial ideology over doing business.

“Many of us have at times made compromises just so that we could get on with doing business without being harassed by the state,” Le Roux said.

These compromises have come at a great price.

“Whenever we optimise for compliance with the state’s ideology, we do not optimise for value-creation, namely the production of economic goods for the benefit of our fellow man,” he said.

“Done at scale all across the country, this has been an economic disaster. Society has paid a tremendous price.”

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