Buyer appetite for pharmacies in England has remained “consistently strong” over the past year, with first-time buyers making up almost three-quarters of registrations in 2026 so far, according to pharmacy sales specialist Hutchings.
In its England pharmacy market update for 2026, shared exclusively with C+D, Hutchings revealed a 35% increase in completed transactions compared to 2025, with corporate sellers “disposing of non-core or superfluous branches” accounting for almost half.
It noted that some large multiples including Morrisons and Well Pharmacy have “sought to reduce losses through branch rationalisation”, while Rowlands has “moved away from certain retail locations” and towards hospital outpatient pharmacy operations.
Competition
Buyer focus is on pharmacies offering “scope to develop clinical services, improve operational efficiency, and unlock additional profitability”, the brokers said, with businesses offering “sustainable earnings and clear opportunities for future growth” remaining the most popular among purchasers.
It added that the “limited supply of quality pharmacies is supporting competition among buyers”, with “well-performing businesses with sustainable profits, strong locations and opportunities to develop additional services” continuing to attract interest from independent owners and pharmacy groups.
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The report said the Midlands and South West have experienced the most corporate and independent sales activity in 2026 so far, followed by the North East, North West and London.
It also identified strengthened buyer demand and “higher goodwill offers in selected areas”, due to the “improved lending environment” brought about by the reduction in the Bank of England’s base rate and to increased certainty around government funding following the additional £340m allocated in the latest pharmacy contract.
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Hutchings said goodwill offers remain the highest for pharmacies located within the M25 and London, “ranging from £0.64 to £1.14 in the pound”, followed by the Midlands, where offers range from £0.59 to £0.98.
The North East has also seen strong goodwill rates, it added, with “increased demand from independent owners expanding their portfolios and well-funded pharmacy groups”.
And it noted that as in 2025, acquisitions have “been led by independent operators seeking to expand their existing businesses”, with activity from group operators and first-time buyers also highlighting strong levels of demand from “established pharmacy owners and new entrants alike”.
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First-time buyers made up 74% of registrations in 2026 so far, but Hutchings also noted that completed sales this yearhave averaged £1.23m, compared with £1.12m in 2025.
This 10% rise in the average turnover of pharmacies sold through Hutchings “may place some opportunities beyond the reach of many first-time buyers”, it said.
“Cautiously encouraging”
The brokers also highlighted supply chain issues as impacting the profitability and performance of the sector, and found that pharmacies providing “a broader service offering” tended to achieve “stronger gross profit margins than those that rely predominantly on dispensing income”.
London pharmacies saw the highest gross profit margins, averaging at 40.6%, followed by the South West of England at 35.4% and the North East at 33%.
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Hutchings described the overall outlook for England’s pharmacy market over the next year as “cautiously encouraging”, adding that “greater certainty around government funding, improving lending conditions and sustained buyer demand” have created a “more stable environment for pharmacy owners”.
It said that “despite failing to fully meet the sector’s financial requirements”, the pharmacy funding deal for 2026/27 “represents a significant increase in funding”
“While challenges remain, it has helped to improve confidence across the sector”, it added.
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It comes after a report by Hutchings in June revealed that the average gross profit margins of Welsh pharmacies sold highest in 10 years.
The report, shared exclusively with C+D, revealed that the gross profit margins of pharmacies sold by Hutchings in Wales have “remained strong”, with year-on-year improvement.
