Independents concerned by loss-leading services
Business While nine in 10 pharmacists polled by C+D believed loss-leading services gave an unfair advantage to multiples, Asda superintendent pharmacist John Evans (pictured) argued service innovation was key to pharmacy's future.
Nine in 10 pharmacists who responded to a C+D reader poll believe the loss-leading services offered at multiples pose a threat to independents.
The survey of 120 readers revealed that only 10 per cent felt loss leaders had a positive effect on the industry, while 90 per cent said that they attracted customers in a way that independents could not afford to do.
But while the Independent Pharmacy Federation (IPF) hit out at the strategy for failing to provide a "sustainable business model", multiples defended the services for spearheading innovation.
"This isn't about big and small businesses – it's about pharmacists trying to be innovative" John Evans, Asda |
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Asda superintendent pharmacist John Evans said independent pharmacies "shouldn't see people trying to be innovative and different as a threat". Although Asda's initiative to supply Ventolin Evohalers at half the prescription charge sparked debate among C+D readers last month, he stressed that this was not a loss-leading service. "This is something that was priced at what we thought was a reasonable margin for the service being offered," he told C+D. Mr Evans added that the strategy should not be seen as a battle between multiples and independents. |
"This isn't about big and small businesses – it's about pharmacists trying to be innovative," he argued. "A lot of independents out there are far more innovative than us and there are many who do things better than multiples. We can't just keep on doing what we've always done in pharmacy."
The comments were backed by CCA chief executive Rob Darracott, who said the ability to provide services would determine the success of pharmacy businesses.
"Pharmacies – independent or multiple – that deliver effective MURs, have engaged with the new medicines service or deliver on the public health and wellbeing services commissioned locally, will be the ones attracting customers in the future," he said.
"If I was looking for a real threat to the marketplace right now, it would be whether pharmacy is in the right place to demonstrate the contribution it makes towards improving patient outcomes," Mr Darracott said.
But IPF chief executive Claire Ward said she was "not at all surprised" that loss-leading strategies had stirred up such strong feeling among C+D readers. "The reality is that for independents, loss leading is not a sustainable business model," she said.
"The way forward is not to be seen as a bargain basement of medicines and ancillary items, but as a high-quality healthcare professional who delivers services and quality dispensing advice without the need for an appointment."
Are loss-leading services good commercial sense or do they devalue pharmacy? Read the full debate on loss leaders in C+D's analysis Comment below or email us at [email protected] You can also find C+D on Twitter, LinkedIn and Facebook |