Financial squeeze for UK pharmacies

Financial squeeze for UK pharmacies

Posted Dec 13, 2019 by Enrico Donà, sales manager

In UK pharmacy is not facing an easy moment: the four largest groups are all reporting losses or falls in the profits. LloydsPharmacy has divested more than 200 pharmaies since 2016, Walgreens Boots Alliance announced on October 28 its latest financial results confirming it “is on track to consolidate” the close of 200 branches by the end of August 2020.

According to its latest financial result Boots saw a 20.7% drop in profits for retail pharmacy in the three months to August which followed a 10.5% year-on-year drop recorded in the three months to May.

Boots UK specifically had “lower script volume and lower NHS funding level” as they revealed in a presentation published alongside the financial results.

Comparable retail sales for Boots UK decreased 3.1% "as the UK market continued be very challenging" it added.

Also Rowlands Pharmacy, the fourth largest group in UK, announced in February 2019 a plan for closing 70 branches.

The situation for the small multiples (groups with no more than 99 pharmacies) and indipendents is not better as they also they are also facing several financial challenges. Pharmacies are under significant pressure because general costs (as wages, property and utility costs) are increasing whereas insurances and governments are operating more and more financial cuts. That makes pharmacy’s position very uncomfortable: the last cut to dispensing fees have been very traumatic to the business and could mean the close of a number of stores.

All this information confirms that UK pharmacy industry is living a challenging situation: is it a hopeless situation? For sure it is not, it is a situation obliging players operating in the market to find new ways and new solutions, obliging to look for alternatives. You can already see movements in this directions: open minded independent pharmacies as multiples are testing new technologies and are trying to understand which benefit can bring automation. It is clear that a lot of changes will happen very soon.

Published by Enrico Donà, sales manager

Export Sales Manager in Videosystem, company that develop and builds the Pharmaself24, Europe’s leading 24-hour automated collection point, increasingly popular in north European countries thanks to its innovative technology.