Pharmacy Retailing in the UK | Verdict Sector Report


The UK pharmacy market has continued its recovery in 2014, increasing its estimated value by 2.1%, the fastest rate of growth since 2010. This has been driven by the OTC market, which grew nearly 4%, outperforming the larger NHS receipts component. The OTC market has been lifted by improvements in consumer confidence, with people more willing to spend on self-care, health and wellbeing.

Key Findings

  • Understand the impact on pharmacy retailing of the Boots/Walgreens merger and how it will increase competitiveness in the sector
  • Use the detailed data and insight on the market, including NHS receipts and OTC, to help form an effective growth strategy
  • Idenitfy the opportunities to grow business in this sector by comparing strategies of the key players in the market and their performance metrics
  • Learn how the UK's ageing population and rising obesity levels will impact the market, allowing you to develop product ranges that are better targeted

The longer-term trend toward reclassification of medicines from prescription only to P category and from P to GSL has continued, supporting pharmacy growth outside the prescription market. As the government seeks to limit NHS budgets and promote self-care, the outperformance of OTC relative to NHS prescriptions is expected to continue.

The end of the 100-hour control of entry exemption, which had been a significant driver of growth in pharmacy numbers, has begun to have an impact on the market, with far more marginal growth in numbers in 2014. Pharmacy numbers have grown by nearly 20% in 10 years, increasing competition, particularly from smaller operators, including the grocers.

The pressure on NHS budgets is likely to continue over the next five years and this will mean that pharmacy's core prescription medicines business will grow only slowly in value if not in volume. The NHS is increasingly looking at using pharmacies to increase its cost effectiveness as well as extending their role in promoting healthy living.

Reasons To Buy
  • What are the factors that will impede or maxmise future growth opportunities and sales in pharmacy retailing?
  • Which retailers are gaining market share, and which are struggling to protect their share and why?
  • How are grocers and local GPs threatening pharmacy specialists and how can retailers deal with these threats and increase customer loyalty?
  • What impact is government strategy having on the market and how can this be managed to ensure success?
  • What services are pharmacy specialists investing in, and will these release pressure on GP's and emergency care providers?

  • Outlook
    • Overview
    • Key Findings
      • Market sees fastest growth since 2010
      • End of 100-hour control of entry exemption slows store increase
      • LloydsPharmacy gains ground on market leader Boots
      • Grocers will continue to grow but at a slower pace
      • Impact of takeovers likely to strengthen power of leaders Boots and loydsPharmacy
      • Pharmacy market could see introduction of US-style drugstore formats
      • NHS cost pressures likely to lead to growth of pharmacy services role
      • Retailers should invest in stores and technology to build OTC and service revenues
  • Recommendations
    • Overview
    • Strategic Opportunities
      • Segmenting store appeal would pay dividends with customers
      • Use technology to handle increasing prescription volumes
      • Store innovation will help boost both services and OTC sales
      • Evidence needed to build arguments for wider health role
      • Work with new commissioning bodies
      • Invest in marketing pharmacies' health expertise to consumers
  • Market Size
    • Overview
    • Pharmacy Market Definition
      • Table Retail pharmacy market definition, 2015
      • Table Abbreviations and terms, 2015
    • Expenditure Trends
      • Market returns to slow growth
        • Table Retail pharmacy market, 2004-14e
      • Dominant NHS revenue source sees little increase
        • Table Retail pharmacy market by revenue source, 2004-14e
      • Growth in prescriptions per pharmacy recovers
        • Table NHS prescription items, dispensed volumes, 2004-14e
      • Pharmacy underperforms wider retail sector
      • OTC sustains market as NHS receipts per head decline
        • Table Pharmacy market per capita, 2004-14e
    • Market Drivers
      • Growth in over 75s will drive prescription volumes
        • Table Changing population by age band, 2013, 2017 and 2022
      • Pressures on NHS will lead to increase in pharmacy services
      • Potential negatives from CCGs and devolved administrations
      • Increasing emphasis on self-care and recovering disposable incomes to boost OTC
  • Channel Shares
    • Overview
    • Channels of Distribution
      • Growth in pharmacy numbers falls back
        • Table UK pharmacy store numbers, 2004-14e
        • Table Number of pharmacies by type, 2009-14e
      • Specialists hold on to leadership of market
  • Market Shares
    • Overview
    • Company Market Shares
      • LloydsPharmacy narrows gap with Boots with share rebound in 2014
        • Table Retail pharmacy market shares (%), 2009-14
        • Table Market shares of NHS revenue (%), 2009-14
        • Table OTC market shares (%), 2009-14
      • Boots strong in both pharmacy and health & beauty
      • Winners and losers
    • Key Operating Statistics
      • Space
      • Space productivity
        • Table Pharmacy sales density estimates (£/sq ft), 2009-14
  • Sector Trends
    • Overview
    • Pharmacy Numbers
    • The Future Role of Pharmacies
    • Online
      • Table Major online pharmacies, 2014
    • Mergers and Acquisitions
    • Grocers
    • Format Development
  • Methodology
    • Methodology: Outlook
      • Market size
      • Market shares
      • Sales density calculation
    • Methodology: Market Size
      • Market size
      • Market shares
    • Methodology: Channel Shares
    • Methodology: Market Shares
      • Market size
      • Market shares
      • Sales density calculation
    • Methodology: Sector Trends
      • Market size
      • Market shares
  • Appendix
    • Appendix: Market Size
      • Current prices
      • Inflation
      • Constant prices
      • Total growth
      • Volume growth
    • About Verdict Retail
    • Disclaimer

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