It’s often been assumed that the multiples are better prepared to weather the effects of funding cuts than independents – but LloydsPharmacy’s shock announcement last week shows that this isn’t necessarily the case, writes The Pharmacist’s editor Beth Kennedy
It doesn’t take a genius to work out that the Government’s cuts to English community pharmacy funding have dealt a massive blow to the sector over the past couple of years. It can be difficult enough at the best of times to run a pharmacy business, but even more so when funding is arbitrarily slashed by hundreds of millions of pounds.
I’d say it’s also a reasonable assumption that multiples – with their numerous branches and dedicated teams to deal with financial and business interests – could be better able to withstand the cuts than, say, your average independent.
So imagine my surprise on Thursday afternoon when a press release popped into my inbox announcing that LloydsPharmacy will be closing 190 of its pharmacies.
One-hundred-and-ninety! Not just a couple of branches, but almost 200 of them, are set to close down through a combination of closures and divestments.
According to Celesio, LloydsPharmacy’s parent company, clawbacks as well as the ‘dramatic’ funding cuts are to blame for the decision, making many branches commercially unviable.
Fortunately, the company has acknowledged that the announcement must have been ‘difficult’ for the staff affected, and says it will do what it can to minimise disruption to patients.
Well call me a pessimist, but after the shock of this news, I wouldn’t blame any of you independent contractors for getting a little hot under the collar.
After all, I can hear you thinking, if LloydsPharmacy is facing closures, then what sort of a chance do I as an independent contractor have?
And I hear you. I really do. But I’m going to be optimistic here (it does occasionally happen) and suggest that the announcement could signal something of a watershed moment for the sector. Multiples are currently something of a dominant force in British community pharmacy, but perhaps this is the first sign that the tides are changing in favour of independents.
One of the truly excellent things about independent community pharmacies is their ability to become the heart of the communities they serve, offering personalised care to patients they are often on first-name terms with. And at a time where everything from shopping to relationships seems to be becoming less and less personal, I’d wager that many patients will find this an increasingly attractive prospect.
But whether or not I’m right on this point – and that remains to be seen – there is one rather comforting take away from the LloydsPharmacy closures.
When it comes to pharmacy businesses, bigger isn’t always better and there isn’t always safety in numbers. Independents, take heart.
Read LloydsPharmacy’s comments on the closures here.
More cuts case studies:
We want to hear your stories about how the cuts are affecting your business. Email firstname.lastname@example.org or tweet us @Pharmacist_News.