INTHEBLACK February 2025 - Magazine - Page 36
F E AT U R E
“In our pharmacy, we describe ourselves as chronic care
specialists. We know the people who come to see us. If a
particular person says something is not right, we know to
pay serious attention because we have seen them week
after week, year after year.”
CURTIS RUHNAU, EMERTON AMCAL+ PHARMACY
NEW ZEALAND PHARMACIES ARE AILING
Relationships provide the feel-good side
of retail pharmacy. On the flipside, it is a
fiercely competitive sector.
In 2023, according to an IBISWorld report,
pharmacies in Australia went head-to-head
for a piece of the A$27 billion revenue pie.
This represented annual growth of almost
3 per cent since 2019.
The industry is split into community
pharmacies, community pharmacy chains
and franchises, and large discount retailers.
In New Zealand, the market has been
more challenging for smaller businesses,
partly because they have been hit harder by
the evolution of price-crunching corporates.
“With the introduction of big players like
Chemist Warehouse, it changes the dynamics
of the market and what businesses need
to do to continue to be relevant,” says
Carolyn Young, chief executive of Retail NZ.
“Price is one of the main drivers for
Chemist Warehouse; however, local
pharmacies need to differentiate by focusing
on customer service and other product offers
that will bring customers into their store.”
Consumer spending across the New Zealand
retail space is down. Pharmacies, like most
other retailers, are not meeting sales targets.
“Our recent Retail Radar report told
us that 71 per cent of retailers did not meet
sales targets in the second quarter this year
[2024], and 42 per cent are uncertain if they
will survive through the next 12 months,”
Young says.
A July 2024 report in Pharmacy Today
said New Zealand pharmacies were currently
experiencing the biggest retail slump
since COVID-19 lockdowns.
However, according to Statista, the outlook
is more positive across Asia, with significant
growth expected. In 2024, the value of the
Asian pharmacy sector was US$513.2 billion
(A$768.3 billion). That is expected to grow
more than 5 per cent annually to
US$657.6 billion (A$984.7 billion) by the
end of 2029.
36 INTHEBLACK February 2025
LOCATION IS VITAL
In the competitive and highly regulated
Australian pharmacy space, a community
pharmacy’s point of difference from
corporate brands is vital, says
Norman Thurecht, managing partner
of Pitcher Partners in Brisbane.
“Chemist Warehouse has been around
since about 2003,” says Thurecht, whose
firm has specialised in the pharmacy sector
for several decades.
“In Australia, the big players still have
an impact on some pharmacies, but a level
playing field seems to have been created
where the big brands and community
pharmacies each have their own customers.”
Pitcher Partners brings decades of
benchmark data to its clients, helping improve
outcomes by pointing out how and where they
could be boosting efficiency and productivity.
Location is obviously a key driver of
customer traffic, Thurecht says. In the
Australian pharmacy game, there are strict
location rules.
A new pharmacy can only be opened,
or an existing pharmacy relocated, if it meets
the many requirements of the National
Health Act 1953 Pharmacy Location Rules,
made under the National Health (Australian
Community Pharmacy Authority Rules)
Determination 2018.
This Determination outlines various rules
such as distance from other pharmacies,
as well as the number of pharmacies allowed
within specific types and sizes of shopping
centres, hospitals and medical centres.
The regulations are not designed so much
as a protection mechanism, the Pharmacy
Guild of Australia states. They instead ensure
new pharmacies go where they are most
needed, with the aim of giving all Australians
equal access to Pharmaceutical Benefits
Scheme (PBS) medicines.
CHARTING CHANGE
Andrew Topp, pharmacist and CEO
of Capital Chemist, says 60 to 80 per cent
