With businesses across the country impacted by the turbulence of today’s macroeconomic environment, we uncover some of the key issues facing UK pharmacies and explore the opportunities available to the sector. 

The Association of Independent Multiple Pharmacies estimates a funding shortfall of £1.1 billion every year. Coupled with reductions in reimbursements from the NHS, pharmacies are projected to see revenues reduced by 12.3% over 22-23. These pressures have been exacerbated by increased costs stemming from a shortage of staff and the well-publicised retail operating cost increases across rents, energy, supply pricing pressures and borrowing costs amongst others. Competition is increasing though technological advancements, and as with all industries, tech is posing a threat to traditional pharmacies by providing consumers with alternative and possibly cheaper options. This rise in online pharmacies and digital healthcare platforms has meant that there are alternative ways to obtain medications, threatening the independent brick-and-mortar pharmacy – as developments to technological solutions continue to evolve and possible big entrants such as Amazon Pharmacy hover overhead – the threat to smaller pharmacies will only continue to grow.

Arguably, if consumers choose to utilise brick-and-mortar pharmacies the threat still does not disappear – larger pharmacy chains will also add increased pressure to smaller independents, with more resources and bargaining power to negotiate better deals with suppliers and insurers – bigger players will ensure smaller independents feel the pinch. 

Changes in prescription volumes and dispensing fees could also impact the revenue streams for the UK’s independent pharmacies, making it difficult to maintain profitability, and with an increased workload and workforce shortage – the pressure on the sector will mount.   

The challenges that independent pharmacies in the UK are facing can be mitigated through seeking early advice, as well as focusing on face to face consultations, providing a personal touch through good customer service and offering the best advice. Additionally, the sector will need to improve stock control management, and explore partnering with buying groups, as well as providing complimentary services to assist in maintaining profit margins and a steady revenue stream.