Pharmacy Retailing in the UK | Verdict Market Report

Jul 11, 2012, 18:34 ET from Reportlinker

NEW YORK, July 11, 2012 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

Pharmacy Retailing in the UK | Verdict Market Report

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With an ageing population, significant changes in government policy and consolidation in the market, Pharmacy is an ever-changing sector. Learn where the opportunities and threats are in the market and how to manage these most effectively for your business.Reduce the impact of changes in government policy on your business by being prepared and understanding where the greatest threats will come from.Use the data, forecasts to 2015, and insight on the market, including NHS receipts and OTC, to help form an effective growth strategy.Understand the impact on pharmacy retailing of the Boots/Walgreens merger and how the investment will increase competitiveness in the sector.Identify the opportunities to grow business in this sector by comparing strategies of the key players in the market and their performance metrics.In 2011, the government announced plans for changes in the control of entry rules that would end the 100 hours exemption and this has prompted a rush of opening applications which we forecast will dilute profitability. 250 new pharmacies opened in the first four months of 2012.Furthermore price deflation is making the pharmacy model non viable. Cost per prescription has fallen 23.0% since 2004 as the government has reduced reimbursement rates. This, combined with imminent patent expirations, will lower prices further.The takeover of Alliance Boots by the largest pharmacy chain in the United States, Walgreens, expected to be completed before 2016, will lead to a major reinforcement of Boots' existing economies of scale. The new group will have 11,000 stores in 12 countries and is expected to have a turnover of $130.0bn (£82.6bn) by 2016What impact is deflation and government strategy having on the market and how can this be managed to ensure success?How are grocers and local GPs threatening pharmacy specialists and how can retailers deal with these threats and increase customer loyalty?Which retailers will gain market share in 2012, which are expected to be the greatest share losers and why? What can competitors learn from this?What are the factors that will impede or maximise future growth opportunities and sales in pharmacy retailing?

EXECUTIVE SUMMARY

Key findings

(Untitled sub-section)

Main Conclusions

Market growth disappoints – NHS volumes up but prices down

GPs are now a competitive threat for retailers

100-hour pharmacy openings have negative impact on profitability in sector

Uncertainty over national versus local commissioning could hit services income

Value-based pricing will hit prices in pharmacy market …

… as it heads towards patent cliff

Walgreens' takeover of Alliance Boots will intensify competition

Grocers aggressively targeting pharmacy growth - collective market share 11.8% in 2012

But strengthened Boots poses a danger to grocers

Other major specialists in retreat

Healthy Living Pharmacies future blueprint for growth

Market dependent on improved consumer environment

Need for format innovation like Lloydspharmacy's Health Village …

… and promotion as trustworthy places for advice

MARKET ANALYSIS

Pharmacy market definition

OTC sales much more resilient than NHS in 2011 and 2012

Volume growth diluted by rise in pharmacy numbers

Pharmacy growth slows in subdued retail market

Market drivers

Ageing population means greater medical need

Distribution channels

Pharmacy numbers rise

Prospect of further restrictions lead to wave of new openings

COMPANY DATA ANALYSIS

Market shares

Three leading specialists slip back and grocers gain share

Grocers strong in health & beauty but lag in pharmacy

Winners & losers

Co-operative and top grocers the biggest winners over five years

Key operating statistics

Space productivity likely to fall in 2012

OUTLOOK

Key Issues

Alliance Boots takeover could halt grocers' expansion

Other benefits on service provision and technology

Impact on other players and the market generally

Flood of 100-hour pharmacies worsens revenue problem

GPs often behind 100-hour applications

Squeeze on revenue per pharmacy will lead to further consolidation

Likely control of entry changes are destabilising the sector

Health & Social Care Act passed

What is the timescale for the changes?

Lack of clarity about services commissioning

Potential for conflict with GPs grows

Services grow but are they the future?

Healthy Living Pharmacies develop rapidly

Framework for service growth

Future funding packages also a factor

Medicine patent cliff comes closer

Value-based pricing looms

New pharmacy formats

Lloydspharmacy experiments with Health Village concept

Need for store innovation

Future key factor is NHS price deflation

OTC will lead weak recovery

Consumer lifestyles provide potential for growth

Marketing will be key

ASDA

Strong image on price drives sales

Recent key events

Raises pharmacy profile with free and low price offers

Proposition

Financials

Capitalises on value image to grow sales

Space

Netto acquisition gives major space boost

Market shares

Netto acquisition boosts OTC

Outlook

Needs to go beyond price promotion in pharmacy

BOOTS

Walgreens takeover makes market leader even stronger

Recent key events

Takeover by US pharmacy giant reinforces strengths

Proposition

Financials

Profit margins grow as latest sales fall

Space

Store portfolio begins to grow again

Market shares

Decline in share continues under pressure from grocers

Outlook

Bigger group will lead to even greater efficiency

THE CO-OPERATIVE PHARMACY

Increases efficiency to overcome pressure on profits

Recent key events

Revamping pharmacy chain

Proposition

Financials

Profits squeezed again by Category M

Space

Slow expansion resumes

Market shares

Under renewed pressure from grocers

Outlook

Continued struggle to maintain profitability

LLOYDSPHARMACY

Targets revival of bottom line

Recent key events

Cuts costs and increases efficiency

Proposition

Financials

Sales up despite very difficult market

Space

Cutting back on underperforming pharmacies

Market shares

Holding its ground by fighting back on OTC

Outlook

Likely to outperform smaller specialist rivals

MORRISONS

Ambitious growth plans

Recent key events

Increasingly ambitious in pharmacy sector

Proposition

Financials

Core food business strong but current trading a worry

Space

Expansion ahead of target

Market shares

Grows but still lags grocery rivals

Outlook

Catching up with grocery rivals will be hard

Health & Social Care Act creates uncertainty

ROWLANDS PHARMACY

Tough challenge from grocers

Recent key events

Aims to counter grocers

Proposition

Financials

Profitability recovers slightly

Space

Static portfolio in tough market conditions

Market shares

Losing further ground in OTC

Outlook

Increases focus on health service role

SAINSBURY'S

Aims to double pharmacy revenue by 2014/15

Recent key events

Presses ahead with expansion

Proposition

Financials

Sales growth slows down

Space

Reduces pace of expansion

Market shares

Pharmacy share resumes growth

Outlook

Lack of clarity over strategy

Supermarket competitors also targeting this market

Sainsbury's ambitious objectives will be hard to achieve

Online could help promote and grow pharmacy

SUPERDRUG

Revamp and loyalty card improve performance

Recent key events

Continues brand repositioning

Proposition

Financials

Profit margins remain very low

Space

Store portfolio stable as retailer concentrates on efficiency

Market shares

Share stabilizes under brand revamp

Outlook

Focus on beauty side of business

TESCO

Bets on 100 hour pharmacies for growth in health

Recent key events

Revamps whole approach to UK market

Proposition

Financials

Sales growth slows down

Space

Growth set to be slowed under new strategy

Market shares

Catching up on The Co-operative

Outlook

Race against time to expand pharmacy

GLOSSARY

Definitions

Financial Statistics – VAT

Trading Profile

Physical Development

Abbreviations

TABLES

Table: Retail pharmacy market definition 2012

Table: Abbreviations and terms used in the report 2012

Table: Retail pharmacy market 2002–12e

Table: Retail pharmacy market by revenue source 2002–12e

Table: NHS prescription items, dispensed volumes 2002–12e

Table: Changing population by age band 2011, 2016 & 2021

Table: Pharmacy market per capita 2002–12e

Table: UK pharmacy store numbers 2002–12e

Table: Number of pharmacies by type 2007–12e

Table: Retail pharmacy market shares 2007–12e

Table: Market shares of NHS revenue 2007–12e

Table: OTC market shares 2007–12e

Table: Pharmacy sales per sq ft 2007–12e

Table: Asda company information 2012

Table: Asda retail proposition 2012

Table: Asda UK key operating statistics 2006–11e

Table: Asda UK trading record 2001–11e

Table: Asda store portfolio 2001–11e

Table: Asda pharmacy profile 2001–12e

Table: Boots company information 2012

Table: Boots retail proposition 2012

Table: Boots UK key operating statistics 2007–12

Table: Boots UK retail trading record 2007–12

Table: Boots store portfolio 2002–12

Table: Boots pharmacy profile 2002–12

Table: The Co-operative Pharmacy company information 2012

Table: The Co-operative Pharmacy retail proposition 2012

Table: The Co-operative Pharmacy UK key operating statistics 2007–12

Table: The Co-operative Pharmacy UK trading record 2002–12

Table: The Co-operative Pharmacy store portfolio 2002–12

Table: The Co-operative Pharmacy pharmacy profile 2002–12

Table: Lloydspharmacy company information 2012

Table: Lloydspharmacy retail proposition 2012

Table: Lloydspharmacy UK key operating statistics 2006–11e

Table: Lloydspharmacy UK trading record 2001–11

Table: Lloydspharmacy store portfolio 2001–11e

Table: Lloydspharmacy pharmacy profile 2001–11e

Table: Morrisons company information 2012

Table: Morrisons retail proposition 2012

Table: Morrisons UK key operating statistics 2007–12

Table: Morrisons UK trading record 2002–12

Table: Morrisons store portfolio 2002–12

Table: Morrisons pharmacy profile 2002–12

Table: Rowlands company information 2012

Table: Rowlands retail proposition 2012

Table: Rowlands UK key operating statistics 2007–12e

Table: Rowlands UK trading record 2002–12e

Table: Rowlands store portfolio 2002–12e

Table: Rowlands pharmacy profile 2002–12e

Table: Sainssbury's company information 2012

Table: Sainsbury's retail proposition 2012

Table: Sainsbury's UK key operating statistics 2007–12

Table: Sainsbury's UK trading record 2002–12

Table: Sainsbury's store portfolio 2002–12

Table: Sainsbury's pharmacy profile 2002–12

Table: Superdrug company information 2012

Table: Superdrug retail proposition 2012

Table: Superdrug UK key operating statistics 2006–11e

Table: Superdrug UK trading record 2002–12e

Table: Superdrug store portfolio 2002–12e

Table: Superdrug pharmacy profile 2002–12e

Table: Tesco company information 2012

Table: Tesco retail proposition 2012

Table: Tesco UK key operating statistics 2007–12e

Table: Tesco UK trading record 2002–12e

Table: Tesco store portfolio 2002–12

Table: Tesco pharmacy profile 2002–12e

Table: Pharmacy market categories & definition 2012

FIGURES

Figure: Retail pharmacy market growth vs total retail 2002–12e

Figure: Population growth by age band 2011–21

Figure: Change in number of pharmacies by channel group 2012e on 2007

Figure: Market share by channel group 2007–12e

Figure: Health & beauty and pharmacy market shares 2012e

Figure: Consolidation of leading shares of the UK retail pharmacy market % 2007–12e

Figure: Winners and losers in pharmacy market share 2012e on 2007

Figure: Pharmacy numbers at financial year end during 2012e

Figure: Changes in pharmacy numbers 2011/12e on 2006/07

Figure: Key Issues in pharmacy retail 2012

Figure: Average NHS revenue per pharmacy 2002–123

Figure: New structure under Health & Social Care Act 2012

Figure: Number of pharmacy contractors offering Top 10 local enhanced services 2010/11

Figure: Lloydspharmacy Health Village 2012

Figure: Retail pharmacy market, OTC, and NHS sales growth % 2006–15e

Figure: Pharmacy market sales growth vs total retail 2006–15e

Figure: Asda fascia 2012

Figure: Asda pharmacy market share 2007–12e

Figure: Asda OTC market share 2007–12e

Figure: Asda NHS revenue market share 2007–12e

Figure: Boots fascia 2012

Figure: Boots pharmacy market share 2007–12e

Figure: Boots OTC market share 2007–12e

Figure: Boots NHS revenue market share 2007–12e

Figure: The Co-operative Pharmacy fascia 2012

Figure: The Co-operative Pharmacy pharmacy market share 2007–12e

Figure: The Co-operative Pharmacy OTC market share 2007–12e

Figure: The Co-operative Pharmacy NHS revenue market share 2007–12e

Figure: Lloydspharmacy fascia 2012

Figure: Lloydspharmacy pharmacy market share 2007–12

Figure: Lloydspharmacy OTC market share 2007–12e

Figure: Lloydspharmacy NHS revenue market share 2007–12e

Figure: Morrisons fascia 2012

Figure: Morrisons pharmacy market share 2007–12e

Figure: Morrisons OTC market share 2007–12e

Figure: Morrisons NHS revenue market share 2007–12e

Figure: Rowlands fascia 2012

Figure: Rowlands pharmacy market share 2007–12

Figure: Rowlands OTC market share 2007–12e

Figure: Rowlands NHS revenue market share 2007–12e

Figure: Sainsbury's fascia 2012

Figure: Sainsbury's pharmacy market share 2007–12

Figure: Sainsbury's OTC market share 2007–12e

Figure: Sainsbury's NHS revenue market share 2007–12e

Figure: Superdrug fascia 2012

Figure: Superdrug pharmacy market share 2007–12e

Figure: Superdrug OTC market share 2007–12e

Figure: Superdrug NHS revenue market share 2007–12e

Figure: Tesco health & beauty display 2012

Figure: Tesco pharmacy market share 2007–12e

Figure: Tesco OTC market share 2007–12e

Figure: Tesco NHS revenue market share 2007–12e

Companies mentioned

Caterpillar Logistics Services, Inc., CMS Energy Corporation, Hutchison 3G UK Limited, J Sainsbury plc, James Cook University, Metro AG, Metro International S.A., Reckitt Benckiser Group plc, Schindler Holding Ltd., Tesco PLC, Wm Morrison Supermarkets Plc

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