A recent Allfin Financial Services survey of Australian pharmacy owners has found that the banner/franchise model is the preferred future model of Australian pharmacies because they demonstrate better financial performance, take better advantage of MedsChecks and overall have a more positive view towards the future.
Allfin Financial Services Managing Director, Mark Churchill said “we conducted the 2018 Pharmacy Pulse Check survey to gain insight into the financial state of the pharmacy industry and the impact that recent industry changes have had on both independent and banner/franchise pharmacy businesses.”
“There are significant indicators identified in recent Australian pharmacies suggesting that the banner/ franchise group approach versus the Independent pharmacy model is a more profitable and future-proof version for pharmacies,” he said
2018 Pharmacy Pulse Check Results
The results of the Survey include:
1. Financial performance of Banner/Franchise pharmacies is stronger than Independents regardless of stores owned.
2. Average profit levels for Independents is lower than Banner/ Franchise groups
While there is the same number of Independents as banner/ franchises (54%) that are operating with a gross profit of 33% or above, it is at the other end of the scale where differences emerge. Over 1 in 10 independents are operating with a gross profit under 28%. This is higher (16%) for those independents that are sole operators.
3. Banner/ Franchise groups are taking greater advantage of MedsChecks than Independents
The average number of MedsChecks claimed per month is higher for Banner/franchises (7.8) than for Independents (4.9). On average across all pharmacies, 6.7 MedsChecks are claimed each month. The number is higher in metropolitan areas (7.2) and in shopping centres (8.1).
Less than half the number of Diabetes MedsChecks are claimed on average (3.1) than MedsChecks. However, higher than average are being claimed in regional areas (3.5) which when compared to general MedsChecks by location, is a stand out figure.
The average number of Diabetes MedsChecks is also slightly higher for Banner/ franchises (3.5) than compared to Independents (2.4).
4. Franchise/Banner pharmacies are more positive about the future of their own businesses and for the industry
Expectations for profit are split evenly for businesses. Overall, 29% of pharmacies expect an increase in profits compared to 31% that believe they will fall. Significantly higher number of businesses in Metro areas believe that their profits will fall (42%).
The financial performance of banner/ franchise groups from the survey indicates that performance is stronger than independent pharmacies.
“It appears that banner groups are working harder on strategies to support their members to ensure they are capitalising on MedsChecks & DAA income. Not to say that independent pharmacy aren’t doing the same, however Franchise Support Offices are more likely to implement a process that when followed, makes it harder to miss this valuable income” said Mark.
For more information on our survey, contact our team here