Implementing a loyalty program could lift sales and boost margin for Sigma Healthcare (ASX:SIG) subsidiary Chemist Warehouse amid growing competition, Jarden Research said in a Thursday note.
The growth of Chemist Warehouse is attributed to its value-led strategy, and Jarden sees an opportunity for the pharmacy retailer through a loyalty program as it looks to increase adjacencies, grow share of wallet and improve terms, as well as expand in new markets.
A loyalty program has the potential to boost sales by over 2% in the first year, and drive margin and total addressable market longer term, positioning Sigma Healthcare as the Australian health leader, according to the investment and advisory firm.
Jarden maintained its overweight rating and price target of AU$3.30 for Sigma Healthcare.
Sigma Healthcare shares rose more than 1% in midday trade on Friday.