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Brokers: Expect multiples to sell or close more branches in 2019

Christie & Co: More collaborative funding in Scotland and Wales has resulted in fewer sales
Christie & Co: More collaborative funding in Scotland and Wales has resulted in fewer sales

Multiples will be considering selling or closing more branches this year and independents are well placed to take advantage, two pharmacy brokers have said.

Andy Harwood, director of Pharmacy Seekers, said: “The big multiples aren’t buying [pharmacies] at the moment.”

Following Lloydspharmacy’s decision to cease trading in around 200 “commercially unviable” pharmacies in England since October 2017, “I’d expect the bigger multiples will be reviewing their portfolios again this year”, he told C+D last week (February 8).

Christie & Co head of pharmacy Tony Evans agreed, stating: “It is widely expected that the churn of smaller, less profitable stores seen in 2018 will continue throughout 2019, whether through closures, disposals or use of the consolidation legislation.”

However, the fact that “a significant number” of Lloydspharmacies were sold (as revealed by an exclusive C+D investigation) rather than closed, shows that “many [branches] remained viable opportunities under ownership in the independent sector”.

Smaller chains and independent contractors are well placed to take on former multiple branches, Mr Evans said, as they have “a more hands-on approach” and “trade under more simplified operating structures”. This means they can mitigate the central operating costs that multiples cannot avoid, he explained.

More pharmacies on the market

Mr Harwood said 2019 has already been busy for Pharmacy Seekers, and judging by this activity, “we will see more pharmacies come to the market in the first half of the year”.

Category M [clawbacks] and funding [cuts] have put pressure on cashflows. Those who have owned businesses for 30-35 years have probably...come back after Christmas thinking they are going to sell,” he explained.

However, despite the funding pressures, the market is “robust” and “there will always be demand for pharmacies”, Mr Harwood insisted.

“The people that want to buy are prepared to embrace new services and do more than just dispensing,” he said.

More activity expected in Northern Ireland

In 2018, Christie & Co saw “an 11% increase in the number of pharmacy applicant registrations”, and 80% of buyers were either first-time buyers or new entrants to the market, Mr Evans said.

“A more collaborative approach to funding and services in Scotland and Wales has resulted in a lower number of sales” in these countries, Mr Evans said. Just 9% of Christie & Co's sales were outside of England last year.

“With the announcement at the end of last year of additional funding in Northern Ireland, we anticipate there may be additional activity here in the year to come,” he added.


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Have you bought or sold a pharmacy in the last year?

Benie Locum, Locum pharmacist

quite the adverrt for prospective pharmacy students....

Peed Off Superintendent, Superintendent Pharmacist

Graham....You have summed it all up superbly......How do you become Chief Pharmaceutical have my vote!

SydBashford Sold&Retired&DeRegistered, Community pharmacist

“and 80% of buyers were either first-time buyers or new entrants to the market”.... either very enthusiastic or very naive !!!

Leon The Apothecary, Student

Hmm, I can see the appeal of being the master of one's own fate, so to speak rather then being at the beck and call of a multiple board. I wish them the best of luck and look forward to them overcoming this climate.

R A, Community pharmacist

" look forward to them overcoming this climate"

More like sticking their heads into the sand and denying reality. Honestly, I had a positive attitude when I first qualified in 2011 and things weren't half bad. However, within a space of a few years, it became clear that all the information we were fed were factually incorrect and things were never going to get better. 


Graham Turner, Non Pharmacist Branch Manager

Things are only going to get worse. So many pharmacies are understaffed and still not making enough profit for the big chain's liking - when the next raft of cuts kick in, things will really hit the fan. Pharmacists will soon be on <30k across the country, newly qualifieds will be working 40 hours a week but their debts will continue to increase because they aren't even able to pay the interest on what they owe. How they will ever be able to buy their own home is beyond me.

It's a comical situation now in pharmacy - you don't have the manpower and resources to even clear the dispensing work, yet you've got your area manager on the phone pressuring you to do MUR, NMS, travel clinic, health checks, diabetes testing, BP monitoring etc. or whatever idiotic charade the clueless pharmacy bods think of next.

Maybe if they cut back on superfluous managment positions and put more staff into the branches things could be workable? Too many chiefs and not enough indians. Funny how some companies don't have the money to even employ some extra staff on minimum wage to provide a basic and safe level of staffing, yet the CEO is still getting paid $15m+ a year. They need to be FORCED into providing a reasonable amount of staff, otherwise they will just keep reducing staffing to cut costs.

Most of these comapnies are relentlessly chasing more and more profits. Since when is it acceptable to reduce staffing, and endanger the public instead of knocking a few million off of the CEO's salary? That shows you precisely where their priorities lie. I would call this behaviour unethical at best.

Understaffing pharmacies just to save money should be illegal, it puts people at direct risk of harm from dispensing errors. But the GPhC will just keep going after the pharmacist who made the error rather than the company deliberately creating a dangerous working environment. What ever happened to root cause analysis? I am fairly confident that 75% of dispensing incidents could be traced back to the pharmacist being under undue pressure due to lack of staff, at least as a contributory factor if not the main cause.

GPhC needs to come up with an algorithm to calculate a legal minimum staffing level for community pharmacies in the UK. However, as this would require the big chains to spend a bit of money and employ some extra staff, they wouldn't like this one bit, which might explain why it isn't happening as it would appear that they are holding the strings. We need a regulator which is brave enough to tackle the big multiples on understaffing because the current one obviously is scared of doing so.

It's very strange how the big multiples are allowed to directly put the public in danger from dispensing errors and the GPhC do nothing, whereas if a pharmacist is even accused of stealing a jumper then they're onto you immediately. Even if a pharmacist DID in fact steal a jumper, how does that put the public at risk? I don't think that it does, so the GPhC shouldn't be involved, let the police deal with it. They are mandated to protect the public. A pharmacist stealing a jumper (or being accused of doing so) puts nobody at risk. Multiples understaffing branches to save money puts the public at massive risk of dispensing errors, yet the regulator does not consider this serious enough to do anything. You couldn't make this stuff up.

Are the big UK pharmacy chains being regulated by the GPhC, or is the GPhC being regulated by the big chains? Definitely something to think about.

Angry Pharmacist, Locum pharmacist

The GPhC is a joke and is not fit for purpose. We need a revolution to over throw these waste of space office rats and appoint a body that will have the INTERESTS and WELLBEING of Pharmacists and Patients as their priority and not profits and bending over to capitalist companies 

R A, Community pharmacist

I've got one better, what kind of company buys 281 branches for £125 million and then closes or sells 190 branches?

What's more moronic is that of the 281 branches it bought, quite a few were 100-hour contracts.

Graham Turner, Non Pharmacist Branch Manager

Yes, that was a massive blunder. And Cormac whatshisname did a runner when it was revealed! They were blinded by the pound signs I suppose, and probably didn't do their due diligence in order to save a few pennies.

Capitalism and healthcare are not a good mix. You're either out to benefit patients, or to maximise profits, trying to do both is obviously a massive failure. I definitely think that healthcare companies should not be allowed to issue shares!

Back in the 80s, pharmacies were remunerated properly, and dispensing was the main activity - none of these useless, ill-conceived "services" existed. Which meant that the pharmacist could take their time with each patient and really help the local community. As soon as it was monetised into these awful services, it became a kosh with which to beat the pharmacist into doing more and more and more, much to the detriment of patients.

I've visited pharmacies in many countries, but the UK is the only one where desperate pharmacists try and coax you into answering some pointless tick-box questions because they are being forced into it by an area manager who is not even a pharmacist.

99% of pharmacy customers just want their medication dispensed promptly or to be sold an otc product, so maybe it would be a good idea to go back to doing that the best that we can instead of veering off-course with "services".

Pharmacy in the UK took a massive nosedive in 2005 when MURs were introduced. I'd love to see the results of a questionnaire campaign asking why the patient was visiting the pharmacy that day - I can guarantee you that 0% of respondents would reply that there were looking for an MUR or NMS! The only time I have met a patient in my many years who even knew what an MUR was, was the time the patient was a pharmacist! And guess what? They refused to do one because they told me it was a waste of their time!

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