Fighting the decline
It's crazy to think that 18 months ago I was just starting in my new role with Right Medicine Pharmacy.
I had spent the previous two years working for Ceuta Healthcare on the P&G category development team working with independent pharmacies on layouts and best practise in store, which helped many retailers to boost sales.
It was a breath of fresh air joining Right Medicine Pharmacy, which has gone from strength to strength in the Scottish market with 16 stores - it is great to be able to try new things without the restraints of a large multiple.
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"it is great to be able to try new things without the restraints of a large multiple" |
But, when I joined, Right Medicine Pharmacy was very focused on pharmacy services and patient care. That's not to say they didn't have good retail space but, as a lot of pharmacies do, they tend to let it tick over and never really find the time to put much focus into improving it. So, my first major task was a full store refit of our Crieff branch, which is a story for another day. Looking around at the high street and supermarkets there is a trend out there of either sell products at a £1 or offer some crazy promotion that usually means a loss leader. As nice as it is to be able to run loss leaders, it's just not sustainable. However, what I did learn quickly is that you can compete in other ways. I started talking to the major wholesalers to see what we could do and how much margin we could get away with without making a loss. It was an interesting learning curve for me and one that changed how we operated our offers and what we are able to offer to our customers. |
By setting in place a dedicated £1 section offering a selection of across-the-board everyday products our sales grew very quickly and, certainly for our stores located in more deprived areas, it has brought new customers to the pharmacy.
Along with a value-based section, we also introduced a special offer section offering things on multi-buy and new product launches that were reduced to catch the customer's eye. Both avenues have been a real boost to our sales and, yes I can hear people saying now "But what about the lost margin on these products?"
Well, what I would say to this is that one store in our group did stock the more standard margin products and rarely sold things as people could get these things cheaper in other places.
Since introducing a larger range of £1 and value products the store is trading up 67 per cent on last year and, instead of zero margin, a small margin of a large volume is a better option all round.
Ask yourself this, when was the last time you really took an interest in your retail space and are you doing enough to entice your customers to come in and buy?
Richard Stephenson is head of retail and operations at the Right Medicine Pharmacy group in Scotland. Previously he worked on the P&G category team
Follow Richard on Twitter @rightmedpharm
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