#PSC10YearsTrading
As we entered our fifth year, towards the end of 2015, a ‘chill wind’ was starting to blow through the sector. The message from the Department of Health was the need for substantial funding cuts as part of the government’s austerity measures and, in an open letter to the PSNC in December, Keith Ridge, the Chief Pharmaceutical Officer made is clear that there would be significant cuts coming in 2016/17.
He also famously started talking about problems associated with clustering (some would say the introduction of 100 hour pharmacies was to blame) and the fact that 40% of pharmacies in England were in locations where there were three or more pharmacies within a 10 minute walk.
A month later, the pharmacy minister, Alistair Burt, predicted that between 1,000 and 3,000 pharmacies might close as a result. Thankfully this didn’t happen (particularly against the backdrop of the current reliance on pharmacies to deliver Covid vaccinations), but it signalled the start of a tough few years where contractors had to work harder than ever just to keep their door open.
Despite the concerns about funding, the pharmacy sales market remained reasonably buoyant although we noticed buyers becoming a little more selective. There was an interesting example of this where we sold a pair of substantial pharmacies in South Devon to the owner of an existing small group in London. He felt there was too much competition in London, and this was pushing prices up unsustainably. He could achieve a better return on his investment by looking for secure businesses further afield.
We also saw continued interest in new pharmacy contracts, with two new pharmacies being opened by our large regional multiple clients after we had secured the new licences for them.
Here’s a recap of years 1 – 4
