Community pharmacy in Great Britain: rise of independents

Chronic underfunding combined with additional pressures from the COVID-19 pandemic has resulted in a net loss of 268 pharmacies in Britain since our last analysis in January 2019 (see Figure 1). Although large multiples have continued to sell off branches, the independent pharmacy sector is growing and now accounts for around 40% of the market.

Figure 1: Evolution of the pharmacy market share for each sector between 2019 and 2022; includes remote pharmacies in each sector
PP = percentage points

Large multiples

There has been a net decrease of 531 large multiple drugstores over the past three years, with nearly all businesses closing branches, including the two largest chains (see Box 1).

However, there are signs that the pace of closures is slowing, data analyzed by The Pharmaceutical Journal showing that net pharmacy closures in 2021 were half of those in 2020.

There is even a newcomer to the large multiple category – Avicenna Retail Ltd – which now has 139 pharmacies (latest acquisitions not reflected in our data, which are by owner; see Figure 2). The multiple spun off from the former pharmacy chain Juno Health in 2019. Since then, it has acquired 57 pharmacies from Dudley Taylor and 35 from Sheppards, alongside several other independent community pharmacies, and plans to continue growing. Avicenna also owns the Avicenna Buying Group, which supports over 1,000 independent pharmacies.

Box 1: Spotlight on Boots and LloydsPharmacy

Boots, the largest multiple, announced the closure of 200 “loss-making stores” in 2019, as well as the closure of pharmacy supply at 22 Boots retail stores in 2021. However, the digital side of the business is growing , with the latest figures showing digital sales in the second quarter of fiscal 2022 increased 60% from pre-COVID-19 levels in the second quarter of fiscal 2020. The multiple also expanded its service online doctor in June 2021 in response to changes in consumer habits following the pandemic. Changes are also underway in the ownership of Boots UK, with parent company Walgreens Boots Alliance putting it up for sale in early 2022, following a strategic review and renewed interest in the US and healthcare. health.

The second-largest LloydsPharmacy chain has also seen a change in ownership, with asset management group Aurelius buying its parent company McKesson in April 2022. LloydsPharmacy has continued its divestment program over the past three years and has seen the strongest net drop in pharmacies among multiples, in 259 branches. However, like Boots, the online business is growing, with LloydsPharmacy reporting a more than eightfold increase in revenue – to 731% – from its LloydsDirect online pharmacy in the 2020/2021 financial year. LloydsDirect is now second only to Pharmacy2U in e-prescribing service appointments, with 586,775 appointments in March 2022, down from 131,740 in March 2020.

May infographic_Community pharmacy in Britain_Figure 2- Large multiples
Figure 2: Evolution of the number of pharmacies owned by each of the large multiples between 2019 and 2022

Small multiples

There has been a net decrease of 44 small multiple pharmacies since 2019, in contrast to the net increase seen in the previous three years. However, some groups have continued to grow (see Box 2).

Enimed, an independent group with pharmacies primarily in the South East of England, recorded the largest net increase in the number of pharmacies among the 12 largest chains (by owner; see Figure 3), acquiring all 19 branches of the Manichem group in England and Wales in 2019.

Box 2: Spotlight on knights

Knights is a family business that was founded in 1984 and now has 98 pharmacies in England and Wales (latest acquisitions not reflected in our data), making it the largest of the small pharmacies.

In 2015 Knights acquired Norchem Healthcare and in 2017 added pharmacies in North Wales and the Wirral to its network through the acquisition of Vittoria Healthcare.

In 2021, Knights acquired Pearn’s Pharmacies, which had 20 pharmacies in South Wales. The business continued to grow and in 2022 Knights purchased Cecil Jones, an independent pharmacy business with 4 pharmacies in South Wales.

May infographic_Community pharmacy in Britain_Figure 3 - small multiples
Figure 3: Evolution of the number of pharmacies owned by the 12 largest small multiples between 2019 and 2022

Independents

The number of independents entering the market has exploded over the past three years, with a net increase of 307 independent pharmacies and 236 owners (see Figure 4). This contrasts with a slight contraction of the independent sector between 2016 and 2019.

Most independent owners (79.7%) own a single pharmacy, and many of them are entering the market for the first time (see Box 3).

Box 3: Spotlight on Brockhurst Pharmacy

Nishaan Amin, a young pharmacist from Portsmouth, bought his first pharmacy – Brockhurst Pharmacy in Gosport – from an independent in October 2020. He recently acquired a second pharmacy nearby, this time from a small chain called Hobbs Pharmacy, which had bought the LloydsPharmacy branch in 2019.

And Amin does not intend to stop there; he says he would welcome the opportunity to take over from any multiples in the region who are looking to get rid of their NHS contracts.

Amin believes independents thrive because they offer more personalized service and are willing to go the extra mile to ensure customers get the medications they need.

May infographic_Community pharmacy in Britain_Figure 4-Self-employed
Figure 4: Evolution of the number of independent pharmacist-owners between 2019 and 2022

Remote pharmacies

Although the increase in the number of distance selling pharmacies (DSPs) appears to be slowing in England (see Figure 5) – DSPs are not permitted in Scotland and Wales – the number of patients appointing DSPs through the service e-prescribing continues to grow, nearly doubling from 999,498 to 1,950,497 between March 2020 and March 2022. 2U Pharmacy received the highest number of appointments at 665,486 in March 2022, up from 421,097 in March 2020.

The number of items distributed by DSPs has quadrupled over the past five years, from 13 million items in 2016 to 53 million items in 2021, an increase of 301%. This compares to an increase of just 2.3% in the number of items dispensed by all community pharmacy contractors in England over the same period.

May Infographic_Community pharmacy in Britain_Figure 5- Remote pharmacies
Figure 5: Evolution of the number of remote pharmacies over the last five years

Sources: register of premises of the General Council of Pharmacy January 2019 and March 2022; NHS Business Services Authority

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