Local chemist’s shops face a struggle for survival
THE small local chemist’s shop is an endangered species as supermarket chains move in on the market.
Countdown recently rolled out $3 prescriptions in all 14 of its instore pharmacies and it had plans for more, which is worrying for small operators such as Chin Loh, who has six stores in Dunedin.
Countdown could offer convenience, variety, better pricing and longer trading hours, he said.
Low’s competitive strategy has included opening a cafe and a gym to complement his pharmacy business.
‘‘The business is no longer about just dispensing pills, customers want more offerings for wellness and health and we have to move with them. People want to get well but they also want to stay well.’’
He had heavily invested in the cafe, which he believed was the future of pharmacy.
‘‘You have to differentiate yourself from the corporate pharmacies if you want to survive.’’
Gore pharmacist Bernie McKone, who owns Quins in Gore and Waikiwi Pharmacy in Invercargill, has also changed tack.
In the past 10 years small pharmacies were coming under more pressure and he recognised there were a number of niche areas such as men’s and women’s health and rural health.
‘‘We took over small services in prescriptions and health promotion that were under the pump and brought them together.’’
He has been developing clinical roles for pharmacists, working alongside GPs in primary care.
In June McKone was recognised for his work and named Pharmaceutical Society of New Zealand-MIMS pharmacist of the year.
First Retail Group managing director Chris Wilkinson said pharmacies needed volume and scale to make a commercial proposition but the funding pharmacies get for dispensing prescriptions was being restrained. Higher compliance costs were another problem.
Smaller operators were joining larger groups, amalgamating or going out of business, he said.
Similar changes were under way in the UK and Australia.
The New Zealand market was split between 55 per cent independent retailers and 45 per cent Green Cross affiliated or part-owned sites.
Countdown’s pharmacy business manager Jeremy Armes said the retailer planned to open more pharmacies to meet customer demand.
‘ You have to differentiate yourself from the corporate pharmacies if you want to survive.’
Medicine was expensive in New Zealand, and since the introduction of $3 prescriptions last year, the supermarket had noticed a significant boost to the number of people filling scripts.
Customers had saved more than $200,000 on prescriptions, he said.
The expansion of pharmacies during the past four years had been deliberately slow and cautious across the country.
It would become part of the standard offer, with Countdown planning to open about eight each year, in the next couple of years.
Wilkinson said Countdown’s strategy helped the supermarket create a point of difference.
‘‘It has achieved a depth of connection with the community. Health and wellness products and services deliver intimacy, trust and ultimately goodwill.’’
This type of relationship was the holy grail for retailers, he said.
‘‘Countdown’s pharmacies span a range of demographics, so it’s clear the strategy is a play at the wider market.’’
Pharmacies in supermarkets have been in the UK and US for decades but Australasian pharmacy ownership regulations helped maintain the standalone model of stores.