Dis-Chem has lost N$5.21 billion in value since its CEO Ivan Saltzman’s letter, which placed a moratorium on employing or promoting white people at the retailer, became public.
According to a report by Daily Investor, Saltzman revealed to investors that many regular Dis-Chem dispensary customers withdrew their scripts after the memo banning hiring white employees was leaked.
It furthermore said it was not all bad.
The Dis-Chem CEO said an analysis of customer data revealed that it also gained black chronic medication customers.
However, the number of clients lost following the moratorium on white employees exceeded the number of clients gained.
The moratorium’s impact was revealed as part of Dis-Chem’s trading update from 1 September 2022 to 5 February 2023.
The report showed a significant decrease in revenue growth which slowed to the lowest level since Dis-Chem was listed in 2016.
Historically Dis-Chem’s average group revenue growth for this reporting period was 12.4%, significantly higher than the 8.7% over the last five months.
Last year, Dis-Chem withdrew an internal memo that called for a moratorium on hiring white people.
In a statement released by the pharmaceutical retailer it said it regretted offending staff and customers.
It furthermore said it was committed to transformation.
“We regret the wording and tone of an internal memorandum that has been erroneously widely shared.
“We acknowledge that it did not follow our correct internal vetting processes, and steps have been put in place to ensure that going forward, relevant checks and balances are thoroughly duly performed.
“More importantly, we sincerely regret the offense and distress it caused so many people, including our staff and millions of loyal customers.”
This comes after Dis-Chem issued a moratorium on hiring white people to improve its employment equity profile.
In a letter to senior management dated September 19, founder and CEO Ivan Saltzman announced the moratorium, which includes external appointments and internal promotions.
“It’s the ratio between white and black that counts. So, when no suitable black candidate is found, and a white is appointed, we need several blacks just to maintain the status quo, never mind moving forward,” said Saltzman.
Saltzman referred to employment equity targets and said that as Dis-Chem is a listed group, these “are harsh measures and necessary if we are to remain profitable and to avoid a potential fine of 10% of turnover, which would cripple the business”.
Meanwhile, this internal memorandum sparked outrage in the country. Some white South Africans are now boycotting Dis-Chem for its decision to enforce a moratorium on the appointment of white people, including promotions.