Suffolk pharmacies are taken over by small independents

Mark Page - director for the South and South-East regions for commercial agents Christie & Co - said as larger chains exited the smaller store market when budgets were cut in 2019, smaller players moved in.

But the current market is healthy, he believed, as the shops have added value due to their "protected" status as pharmacies.

New outlets have to be approved by the NHS and this - and moving sites - is a complicated process which may not be successful if they threaten an existing pharmacy business.

There are 11,770 pharmacies in England, according to Christie & Co's Pharmacy Market Review 2023.

"I live in Suffolk so I am very familiar with Suffolk pharmacies. I have been with Christie and Co for 20 years and working in the pharmacy department for 13 years," said Mr Page, who oversees one of the agent's eight regions.

"The market has changed. It's gone almost full circle. It's a very different market now to where it was 13 years ago.

"Beforehand back in 2010/11 there was a real shortage of pharmacies coming up for sale."

These sales would only occur when a pharmacist was retiring, he said. "Most of the larger operators were on a build platform," he explained, and it was "unfashionable" to sell them.

However, when changes in the pharmacy budget were announced in 2016 and actioned in 2019, it shook things up, he explained.

The Department of Health and Social Care cut the pharmacy budget by about a tenth - putting added pressure on businesses.

"That effectively shifted the remuneration model for community pharmacy which meant pharmacy operators had to take a look at their stock and see if they needed all their pharmacies," he said.

"It became harder for the multiples to make profit out of smaller branches so they had to look at off-loading."

The choice was to sell, to merge or to close the shop, he said. 

"Some of the smaller ones have been sold and trickled down into the independent stores. There are more independent ones than 10 years ago in Suffolk as well. 

"I have had multiple operators like the East of England Co-op who sold to an independent operator who in turn sold to complete independents/first time buyers."

He added: "There have been a few closures but there have been probably more sales than closures and there have been mergers (such as where two pharmacies were opposite each other on the same street)."

The biggest cost in a pharmacy business is the cost of the pharmacist, he explained.

"Your locum pharmacist is the highest-paid member of the team. They are responsible for the staff," he said.

These can make about £65k for a five and a half day week - but can't even leave the premises for lunch, he explained, as there has to be a pharmacist on site when the store is operating.

But for pharmacists willing to go it alone and set up in business for themselves, it was still an attractive prospect.

"People wouldn't do it if it wasn't profitable," he added.

Pharmacies which come on the market attract multiple buyers, he added. "There's still a lot of demand for independent pharmacies. There's a culture within pharmacy to be your own boss and own your pharmacy."

Despite a small dip in pharmacy values in 2019 they have been on the rise since - suggesting some level of immunity to the pressures on other parts of the high street.

This September, Christie & Co sold Queen Street Pharmacy in Southwold - a typical deal in which an independent was bought up by another independent.

The store - which was owned and run by Bharat & Jane Patel for 25 years and dispensed about 4,146 items a month - was sold privately to another independent operator which owns Station Pharmacy in Elmswell.