Why independent pharmacies are gaining momentum again

The high street began with many family-run businesses, including pharmacists providing the communities they served with medicines and other services. Being able to access advice and medicines locally was essential at a time when many consumers did most or all their shopping on the high street.

But with the rise of a few more prominent names in the pharmacy game, the independent family-owned shops became fewer and farther between. This, coupled with pharmacies becoming increasingly common inside supermarkets caused independent operators to take a hit and take up a small portion of the market.

Now, pharmacy usage trends are changing again, and the momentum is shifting back to family-run operations. With LloydsPharmacy selling their UK retail portfolio, the announcement of their mass exodus from within over 200 Sainsbury’s branches and an increasing customer preference for independently-run pharmacies, these changes are following a broader move away from large faceless companies to supporting the local businesses in your area. To meet this change of preferences, here’s what the independent pharmacy can offer that keeps customers returning.

A closer community connection

A local pharmacy can be much more than a shop within its community. As well as providing prescriptions and medicines that its patrons need, they can provide more personalised care through a better connection to their local customers. These relationships are built over time, especially when you have generations of families as owners and customers of the business, and can make all the difference to the customer experience.

Knowing customers personally and therefore being better able to tailor service is just one reason why more customers prefer to shop with small retailers. Payment card provider American Express is also aware of the lure that independent retailers offer shoppers, so they introduced their Shop Small scheme to further incentivise spending in such independent businesses. These small improvements to the customer experience in a pharmacy (particularly as this is about health, an area that many find unpleasant or a chore to do) can make all the difference in deciding to switch permanently to an independent operator.

Greater autonomy over business decisions

As an independent retailer, you can set your own rules in almost all areas of your business. Want to change your business hours? Decide for yourself how much of each item you want to stock? The power is in your hands.

Where being a franchisee of a larger chain provides other benefits and safety nets, you don’t get the same freedom to make your retail space exactly as you would like it. And while larger chains can offer the familiarity of the same products, layout and branding across many stores, the difference and variety of what independent pharmacies stock all add to the charm of the customer experience. You have greater freedom to react to current and emerging trends in terms of demand for both products and services to suit your customer’s needs. You could even manage your own feedback by collecting comments from your customers directly, and the smaller size of an independent means that they can quickly implement changes to benefit local customers.

Additionally, one of the critical issues facing the sector is the national shortage of pharmacists, leading to significantly higher locum rates over the last few years, where standard pay is around £35-40 per hour but can reach up to £65 per hour. Increased staff costs hurt profit margins and, in some instances, prevent stores from opening. Such steep jumps in rates can considerably impact big chains like LloydsPharmacy having to pay these in hundreds of locations, which could be a significant factor in the sale of many of their sites. Independent owners are intrinsically better placed to manage this issue, as the owners are most likely trained pharmacists themselves and are therefore less likely to be dependent on locum workers.

Choice of services

Pharmacies are increasingly a place where you can find a wide range of services, from screenings and vaccinations to make-up and gifts to toys and food. As well as medicines and advice from a health professional, it’s these additional services that are making the difference for customers, and as an independent operator, it’s up to you to decide what you offer to your customers to keep them coming back.

When pharmacies first appeared in supermarkets, a great benefit to customers was the efficiency of shopping in a larger retail unit with more products available to buy at the same time as your prescription. However, independent pharmacies now have the opportunity to differentiate their offering by broadening the array of services they offer to customers. This approach will keep independent pharmacies popular and differentiated, which is crucial when the community pharmacy industry faces a funding crisis.

Director of Debt Finance Steve Wilson has noticed that the changing face of the retail pharmacy market is forcing business owners to adapt fast to survive: “Retail was already in a precarious position pre-covid due to the shifting preference for online shopping and high rental unit costs. Fortunately for independent pharmacies, the uptake in online prescription dispensing has been slow, and the physical pharmacy is how many people still access their medication.

Customers still enjoy the connection to their high street and there are opportunities to succeed for those willing to adapt to offer what customers are currently looking for. So providing these additional services over and above only dispensing is key to survival and differentiation for pharmacies today.”

Customers value independent retailers, and they continue to thrive despite bigger players in the market. But as the high street is still adjusting to its new normal post-covid, pharmacies must give their customers reasons to return and resist the lure of online dispensaries. If you’re looking to expand your own pharmacy, apply for your own fast business loan today.

 

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