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NHS landlords review Lloydspharmacy sites after rent reduction plea

Lloydspharmacy currently rents 12 sites from NHSPS
Lloydspharmacy currently rents 12 sites from NHSPS

NHSPS is conducting a “full review” of the sites Lloydspharmacy leases from the organisation, after the multiple asked health centre landlords for a 25% rent reduction last year.

In November 2020, Lloydspharmacy announced that it had closed 99 pharmacies in the previous 12 months and that it needed more support from landlords to avoid further closures.

The multiple revealed that it was asking its health centre landlords, including NHS Property Services (NHSPS), for a 25% rent reduction, in recognition of “COVID-19 related costs and reduced footfall”.

But NHSPS was “refusing to recognise the impact of reduced footfall”, Lloydspharmacy claimed at the time. NHSPS told C+D that it had written to the CEO of McKesson UK – Lloydspharmacy’s parent company – in early November, to suggest “practical and tangible solutions”, but said it had not received a response from the multiple.

More than four months later, an NHSPS spokesperson told C+D on Tuesday (March 23) that the organisation “has been actively engaging with Lloydspharmacy on this issue and is in the process of conducting a full review of the sites they lease from us”. 

Lloydspharmacy currently rents 12 sites from NHSPS, the spokesperson confirmed.

NHSPS said it has “requested additional information from Lloydspharmacy to complete this work” – which includes the outcome of some internal reviews the multiple is conducting, as well as some prescribing rates data.

“[We] will discuss a way forward with the company once this is done,” they added.

A Lloydspharmacy spokesperson confirmed to C+D that the multiple is “in dialogue with NHSPS”.

“No attempt from several landlords”

Lloydspharmacy has had “positive discussions” with some of its landlords, “who understand the importance of the long-term viability of pharmacy”, the details of which “remain confidential”, the spokesperson added.

However, they said there are “still several landlords that have made no attempt to acknowledge that the impact of COVID-19 and associated costs should be worked through together”.

In 2019, Lloydspharmacy decided to close its branch in Weston Favell Health Centre, Northampton, following NHSPS’s decision to “double our rental price”, McKesson UK CEO Toby Anderson said at the time. 

Rowlands: “Ongoing discussions”

Last year, Rowlands also told C+D it was “in discussions” with NHSPS to negotiate rent reductions. It argued that a “review of health centre rentals is long overdue”, and that rents need to reflect “the reality of current circumstances”.

A Rowlands spokesperson told C+D this week that “discussions with landlords are ongoing and are commercially confidential. As such we cannot comment further”.

An NHSPS spokesperson told C+D today that it has been “in dialogue with Rowlands over the past twelve months” and is working to find a solution that “works for all parties”, but that can also achieve “best value for the wider NHS”.

Last year, Rowlands closed its Colne Health Centre Pharmacy in Lancashire after discussions with NHSPS failed to result in a rent reduction.

Have you suffered financially from high rents for your pharmacy?

Adam Hall, Community pharmacist

The NHS can't have its cake & eat it - it can't reduce pharmacy income on the one hand but still expect rents (no doubt linked to RPI or some such) to keep increasing

Leon The Apothecary, Student

Looking at it maybe a bit more pragmatically, I think they can. I look at Amazon Pharmacy and all I can think is that they are going to prove how outdated the Pharmacy is run. 

Adam Hall, Community pharmacist

Leon - I see where you are coming from but the NHS still has to try to recoup some of the costs of build plus, as suggested by others, they will be left with an empty building

J RP, Community pharmacist

Nearby my independent pharmacy, lloyds moved from the high street into the closest surgery to us. The rent is from NHSPS. If the NHS are not charging them what a private landlord would (extortionate), I see this as unfair to my business, especially as it is from the NHS and not a private landlord. They would practically be giving cheap easy nominations to lloyds, putting me at a disadvantage. You might say well that's business/life. Well then the NHSPS charging what an extortionate private landlord would is also business/life.

C A, Community pharmacist

Well then the NHSPS will have a nice big zero income to look forward too...

P M, Community pharmacist

or they will open coffee shops

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