Weekly Reports | Jun 20 2025
GLP-1 weight loss medications are set to impact on Australian retailers, while a small biotech is making strides in proving up its drugs, and hotel management SaaS grows.
-Australians embracing GLP-1 weight loss drugs boost pharmacy sales
-GLP-1 popularity might be a negative for Quick Service sector
-Clarity looking to punch above its weight in cancer detection drugs
-SiteMinder is adding value via new transaction services
By Danielle Ecuyer
Welcome back to In Brief with the quote of the week from Amundi:
"Global growth forecasts have taken a hit since the beginning of 2025 and the uncertainty about US trade tariffs will likely persist. We think tariffs will hurt growth more than boost inflation and imply higher real interest rates.
"Our base-case scenario is that policy uncertainty will subside over time, allowing for a more orderly relocation of supply chains with the average US tariff rate 15 percentage points higher than before the current administration took office. Global growth decelerates without major setbacks."
GLP-1s: changing consumer habits
Thus far the market narrative on the possible impact of GLP-1 drugs has very much focused on companies like ResMed ((RMD)) in treating sleep apnea via weight loss, but the US experience suggests impacts can be far more broad-reaching.
Australia currently has around 300k monthly users of GLP-1 drugs, which is just under 1.5% of the population and up from 0.6% in 2022.
In the US, the percentage currently sits at circa 6% of the population, with data-collector Nielsen noting 31% of Australians are likely to use the drug versus 27% in the US market, which suggests a lot more upside in the uptake.
Jarden's deep dive into the impacts of Australians taking GLP-1 medication on retailers is quite eye-opening.
For weight loss, the drug is not under the Pharmaceutical Benefits Scheme (PBS) and can cost up to around $300 per month, prescribed by a doctor. Once on the drug, the US experience reveals changing consumer habits.
Summarising the key impacts on retail in Australia, the analysis found the following:
-With an estimated 66% of Australians who are overweight, or 14.1m adults, there is potential for over $2.4bn in prescription sales and over $700m for vitamins and supplements as GLP-1 drug consumption rises. The GLP-1 medication can cause loss of muscle mass, which the analyst suggests will drive demand for supplements such as Vitamin D, Calcium, Magnesium, Iron, B vitamins, and Omega-3 fatty acids, which support improved health.
Sigma Healthcare ((SIG)) is highlighted as the best positioned to benefit, as it is a top destination for consumers buying supplements. Around 45% of people purchase supplements at Chemist Warehouse, compared to other pharmacies at 23% and supermarkets at 28%. Jarden estimates Sigma can gain around $320m in sales.
Ebos Group ((EBO)) and Wesfarmers ((WES)) are also indirectly likely to benefit.
There may also be some structural impacts to alcohol retailers from reduced consumption, affecting Endeavour Group ((EDV)) and Treasury Wine Estates ((TWE)). Supermarkets are considered a net neutral, including Coles Group ((COL)), Metcash ((MTS)), and Woolworths Group ((WOW)), although an ongoing shift to Sigma and Wesfarmers is not out of the question.
-Other positive impacts include a shift to smaller clothing sizes and an increase in exercise. GLP-1 users are more likely to go to the gym, which Jarden believes has a possible positive flow-on impact for sports clothing and equipment retailers, such as Super Retail Group ((SUL)).
Lululemon's CEO has highlighted a shift in shopping trends, with the brand selling out of smaller sizes (XXS, XS) and higher sales in the Small and Medium categories, which is attributed to higher GLP-1 usage.
-Spending at Quick Service Restaurants (QSR) is expected to fall, with the US experience revealing GLP-1 users spend around -61% less on takeout/delivery and -63% less on restaurants. With adult Australians spending around $1,130 per annum on QSR, if GLP-1 share moves to 4.5% of the population, then Jarden estimates QSR spend declines by about -40%.
Out of the listed stock coverage, the analysis points at Domino's Pizza Enterprises ((DMP)) as potentially the most under threat, followed by Collins Foods ((CKF)) via KFC, and less so for Guzman y Gomez ((GYG)) due to an increasing focus on healthier meal choices.
Jarden has a Buy rating with a $3.30 target price for Sigma; Ebos is Overweight rated with a NZ$41.50 target; Wesfarmers receives an Underweight rating and $73.10 target price.
Super Retail is Overweight rated with a $14.80 target; Collins Foods is Overweight rated with a $9.95 target; Domino's was recently downgraded to Neutral from Overweight with a $37 target; and Guzman y Gomez was initiated with an Overweight rating and $35.10 target price.
An Overweight rating refers to the level of suggested exposure relative to the stock's index weighting, which is higher in this instance.
For more information on Sigma, check out https://fnarena.com/index.php/2025/06/19/sigma-healthcare-synergies-margins-in-focus/
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