Johannesburg - With the recent acquisition of a Pretoria-based pharmacy wholesaler, retail group Shoprite Holdings [JSE:SHP] has aggressive plans for its MediRite chemist chain in rural areas.
In late November 2009, the Competition Tribunal unconditionally approved the merger of Shoprite and pharmaceutical group Transfarm.
Shoprite CEO Whitey Basson said the purchase of Transfarm will result in MediRite customers enjoying improved stock availability and lower prices.
"It makes it possible for MediRite to deliver a basic healthcare service in areas where there are no clinics or pharmaceutical facilities," said Basson.
"The acquisition of the wholesaler will enable the group to further extend and improve such services to rural communities."
Shoprite has so far opened 100 MediRite pharmacies inside Shoprite and Checkers supermarkets, and plans to continue rolling out more pharmacies.
Coronation Fund Manager's Quinton Ivan called Shoprite's plans a "clever strategy", saying they whould enhance the convenience offered to customers. However, he doubts whether it would have a significant effect on earnings, as food will remain Shoprite's dominant contributor.
He likened MediRite to Shoprite's other small in-store brands - Money Market and Computicket - saying these improve footfall, but remain small contributors to the group's earnings.