Sainsbury's got 'good deal' for pharmacies, says broker
Pharmacy broker Scott Hayton says the deal will put the supermarket chain in a "more competitive" position
Sainsbury’s got a “really good deal” out of the sale of its pharmacy business to Lloydspharmacy, a pharmacy broker has said.
The supermarket sold its 281 pharmacies to Lloydspharmacy for £125 million last week, and Hutchings Consultants director Scott Hayton told C+D that Sainsbury’s “wins on every count” from the buyout.
Lloydspharmacy will pay annual rent for each pharmacy, and although the amount has not been disclosed this money will allow Sainsbury's to be “more competitive” with "cut-price" supermarkets such as Lidl and Aldi, he said.
The supermarket acquired "a significant proportion of" its pharmacies through the 100-hour loophole for no upfront cost, which meant it had built the pharmacy business "from nothing" and could now enjoy its financial value, Mr Hayton said.
“From a customer perspective [there is] still everything under one roof. They’ve probably got a better service offering with Lloyds in there,” he told C+D.
"Significantly below" typical market rate
Tony Townsend, owner of Townsend business sales, said the deal will allow the supermarket to concentrate on the “part they play best” – selling food and cosmetics – while investing money in marketing.
Lloydspharmacy paid just under £450,000 per pharmacy, which was “significantly below” the typical market rate because of the large number of branches bought at once, Mr Townsend told C+D.
“Not many potential buyers have the wherewithal financially to complete that sort of transaction. Perhaps Sainsbury’s see it as giving more independence to their pharmacy holding; [the branches] are now in the hands of the professionals who have run successfully pharmacies for a great number of years,” he added.
Last week, an economic analyst told C+D it is only "a matter of time" before other supermarkets follow Sainsbury’s lead and sell off their pharmacies.