Retail Chemists & Drugstores

Published by: Key Note Publications Ltd

Published: Jul. 1, 2008 - 102 Pages

Table of Contents

Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

Retail Chemists

Drugstores

In-Store Pharmacies

PRODUCT SECTORS

Prescription-Only Medicines

Over-the-Counter Pharmaceuticals

Other Products

MARKET TRENDS

Government Seeks to Widen Chemists' Role

NHS Budget Comes Under Pressure

ECONOMIC TRENDS

Gross Domestic Product

Table 1: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2003-2007

Household Disposable Income

Table 2: UK Household Disposable Income Per Capita (£), 2003-2007

Inflation

Table 3: UK Rate of Inflation (%), 2003-2007

Unemployment

Table 4: Actual Number of Unemployed Persons in the UK (million), 2003-2007

Population

Table 5: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007

MARKET POSITION

The UK

Table 6: Sales Through Retail Chemists as a Percentage of Total Retail Sales at Current Prices (£m at rsp), 2003-2007

Overseas

2. Market Size

THE TOTAL MARKET

Table 7: The Total UK Market for Retail Chemists by Number of Enterprises and Value at Current Prices (number and £m at rsp), 2003-2007

Figure 1: The Total UK Market for Retail Chemists by Value at Current Prices (£m at rsp), 2003-2007

BY PRODUCT SECTOR

Prescription-Only Medicines

Table 8: Number and Cost of Prescriptions Dispensed by Retail Chemists in the UK (million, £m and £), 2002-2006

Over-the-Counter Pharmaceuticals

Table 9: Sales of OTC Pharmaceuticals by Retail Chemists by Value at Current Prices (£m at rsp and %), 2003-2007

3. Industry Background

RECENT HISTORY

NUMBER OF COMPANIES

EMPLOYMENT

REGIONAL VARIATIONS IN THE MARKETPLACE

DISTRIBUTION

HOW ROBUST IS THE MARKET?

LEGISLATION

KEY TRADE ASSOCIATIONS

Association of the British Pharmaceutical Industry

Company Chemists Association Ltd

National Pharmacy Association

Royal Pharmaceutical Society of Great Britain

4. Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

AAH Pharmaceuticals Ltd

Company Structure

Current and Future Developments

Financial Results

Alliance Boots Ltd

Company Structure

Current and Future Developments

Financial Results

ASDA Group Ltd

Company Structure

Current and Future Developments

Financial Results

Co-operative Group Ltd

Company Structure

Current and Future Developments

Financial Results

Day Lewis PLC

Company Structure

Current and Future Developments

Financial Results

Lloyds Pharmacy Ltd

Company Structure

Current and Future Developments

Financial Results

Wm Morrison Supermarkets PLC

Company Structure

Current and Future Developments

Financial Results

Paydens Ltd

Company Structure

Current and Future Developments

Financial Results

L Rowland & Company (Retail) Ltd

Company Structure

Current and Future Developments

Financial Results

J Sainsbury PLC

Company Structure

Current and Future Developments

Financial Results

Superdrug Stores PLC

Company Structure

Current and Future Developments

Financial Results

Tesco PLC

Company Structure

Current and Future Developments

Financial Results

Other Companies

Buying Groups

OUTSIDE SUPPLIERS

MARKETING ACTIVITY

Main Media Advertising Expenditure

Table 10: Main Media Advertising Expenditure by Retail Chemists (£000), Years Ending March 2007 and 2008

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

PREVALENCE OF COMMON MEDICAL CONDITIONS

Table 11: Proportion of Adults Who Have Suffered from Common Medical Conditions in the Last 12 Months (%), 2007

MOST COMMONLY USED REMEDIES

Table 12: Proportion of Adults Who Have Taken Various Medications and Remedies in the Last 12 Months (%), 2007

Headache Remedies and Analgesics

Table 13: Adults Who Have Taken Headache Remedies and Analgesics in the Last 12 Months (%), 2007

Cold and Flu Remedies

Table 14: Adults Who Have Taken Cold and Flu Remedies in the Last 12 Months (%), 2007

Sore-Throat Remedies

Table 15: Adults Who Have Taken Sore-Throat Remedies in the Last 12 Months (%), 2007

Indigestion/Heartburn and Stomach Remedies

Table 16: Adults Who Have Taken Indigestion/Heartburn and Stomach Remedies in the Last 12 Months (%), 2007

Cough Mixtures

Table 17: Adults Who Have Taken Cough Mixtures in the Last 12 Months (%), 2007

7. Current Issues

DANGERS OF ONLINE PURCHASING OF MEDICINES

SUPERMARKETS INVESTIGATED FOR FIXING PRICES

DANGERS OF INCREASING THE AVAILABILITY OF DRUGS

8. The Global Market

MARKET SIZE

THE US

EUROPE

9. Forecasts

INTRODUCTION

The Economy

Table 18: Forecasts for the UK Economy (%, million and 000), 2008-2012

FORECASTS 2008 TO 2012

Table 19: The Forecast Total UK Market for Retail Chemists by Value at Current Prices (£m at rsp), 2008-2012

Figure 2: The Forecast Total UK Market for Retail Chemists by Value at Current Prices (£m at rsp), 2008-2012

MARKET GROWTH

Figure 3: Growth in the UK Market for Retail Chemists by Value at Current Prices (£m at rsp), 2003-2012

FUTURE TRENDS

Demographics

Table 20: The Forecast UK Resident Population by Age (000), Mid-Years 2006-2031

Market Segmentation

Product Development

Competition

10. Company Profiles

AAH Pharmaceuticals Ltd

ASDA Group Ltd

Day Lewis PLC

Lloyds Pharmacy Ltd

Wm Morrison Supermarkets PLC

Paydens Ltd

L Rowland & Company (Retail) Ltd

J Sainsbury PLC

Superdrug Stores PLC

Tesco PLC

11. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Bisnode Sources

Abstract

The total value of chemists' retail sales of goods covered by this Market Report was £13.87bn in 2007, according to Key Note estimates, which are based on figures from National Statistics' Annual Business Inquiry. The market showed strong growth over the review period (2003 to 2007), with sales rising by 26.3%. However, the number of outlets is declining, as a result of major grocery chains' increasing penetration of the market. The strong sales growth reflects the overall buoyancy of retail sales, as well as some factors unique to this market, such as the development of new and more sophisticated drugs and a rise in the number of drugs being prescribed.

Retail chemists account for a relatively small proportion of overall retail sales in the UK. Key Note estimates that, in 2007, sales through retail chemists represented 4.9% of total retail sales. In terms of value, the sector is certainly overshadowed by the food stores (worth around £110bn in 2007) and areas such as textiles, clothing, leather and footwear (£44bn) or household goods (£41bn). However, sales via retail chemists rose as a proportion of overall retail sales over the review period (2003 to 2007), reflecting the rising cost of medicine and increased spending on medical goods as the population ages.

The pharmacy market has undergone a dramatic change over the past decade as the companies that once dominated the sector have felt the onslaught of competition from the major grocery retailers. Since the abolition of resale price maintenance (RPM) in 2001, the supermarket chains have been able to boost their presence in the market at the cost of traditional pharmacy chains. The buying power of the grocery majors, such as Tesco, ASDA and Sainsbury's, is leaving even the large pharmacy chains, such as Boots, struggling to compete on price.

In April 2005, a new contract came into effect that further deregulated the market. Internet-only pharmacies can now open in the UK, while rules on the location of new pharmacies have also been eased. The new contract also reflected the Government's desire to boost the role of pharmacists in dispensing medical care in the UK. As a result of the new contract, pharmacies are no longer simply viewed as a channel for dispensing and supplying medicines, but as a means of offering an ever-expanding range of clinical services.

The Department of Health's (DoH's) White Paper on pharmacies, published in April 2008, makes clear that the Government wants to expand the role of pharmacies even further, which is likely to make the sector even more attractive to the major grocery chains.

Key Note forecasts that the market for retail chemists will continue to show strong growth over the next 5 years (to 2012) and will expand at a pace well above inflation over this period. Sales of both prescription and over-the-counter (OTC) products are likely to increase sharply, as new products come onto the market and the population continues to age. The increasing range of services that pharmacists can offer will also support strong sales growth.

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