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  • Divesting high street pharmacies?

    It's very likely hub and spoke model will be the only sustainable means of running a PROFITABLE operation for the multiples because NHS will continue to decrease reimbursement does this mean the multiples will divest a significant portion of their bricks and mortar pharmacies if they move onto hub and spokes? If you at the cons they are far and few:

    1) Retail: Boots.com is a very popular site and people have become very confident in purchasing online and this means its possible to stock inventory in one or fewer sites. Therefore savings are significant for retail pharmacies if they sell via online medium. In addition physical stores are unable to compete on price against supermarket or hypermarkets either.
    2) Many people have become used to mail order retail, therefore, it would be possible to convince people to use a mail order pharmacy service. If fewer pharmacies are operated this would allow the multiples to invest more on delivery runs but it increase their profit margin because they no longer are involved in operating so many physical stores.
    3) The sites they may divest themselves of may end up being sold to the independent sector if anyone is willing to invest so much cash in a sector riddled with uncertainty or the multiples may ask the PCT that the pharmacy be taken off the list.

    As inconceivable as it sounds you only have to look at the retail bank sector to demonstrate the plausibility of this happening. 17 years ago you could find a bank within 20 minutes walk and you always had someone to wait on you now branch numbers are reduced and the service they provide within a branch is so mediocre it acts as an incentive to use their online site which is far more efficient and user-friendly.

  • #2
    I have been looking at this scenario for some time. In addition there will not be any:

    1) High Street level business rates

    2) Expenses involved with premises such as repairs, routine maintenance, decoration, heat and light, security....

    3) No need for an extended peripatetic management chain.

    4) Reductions in staff costs, training etc.

    Looking at 1) above I have been wondering how Local Authorities will be replacing the income from UBR on retail premises. My own feeling is that they will gradually increase the domestic Council Tax.

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    • #3
      Things will become even easier for the hub when the NHS forces its doctors surgeries and other out of hours sites to use EPS.

      Banks is an interesting one to mention. I would mention libraries and post offices.

      Libraries are basically still there at all because they are required to be by law. Compared to 10 years ago many had their hours cut by a lot. Many have closed as well. Where there used to be packed 10 years ago with people using computers now they are mostly empty. All lending is done by a self scan computer. There are librarians but lower staffing levels and if you sit and study all day in a library you will see that librarians are spending their time dealing with issues, referring people to drop in clinics that use the building etc. I think we could become the healthcare equivalent.

      I do think about a third of the 10,000 pharamcies will go in the next few years. I think those that survive will also have their staffing levels cut by a third and ramp up other new services.

      A lot of people are quite anti-EPS and anti-delivery but I think this proportion will decline rapidly when the system goes totally electronic and the doctor tells them if they haven't got a smart phone to get a token it needs to be sent somewhere.

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      • #4
        Originally posted by mcitr View Post
        Things will become even easier for the hub when the NHS forces its doctors surgeries and other out of hours sites to use EPS.

        Banks is an interesting one to mention. I would mention libraries and post offices.

        Libraries are basically still there at all because they are required to be by law. Compared to 10 years ago many had their hours cut by a lot. Many have closed as well. Where there used to be packed 10 years ago with people using computers now they are mostly empty. All lending is done by a self scan computer. There are librarians but lower staffing levels and if you sit and study all day in a library you will see that librarians are spending their time dealing with issues, referring people to drop in clinics that use the building etc. I think we could become the healthcare equivalent.

        I do think about a third of the 10,000 pharamcies will go in the next few years. I think those that survive will also have their staffing levels cut by a third and ramp up other new services.

        A lot of people are quite anti-EPS and anti-delivery but I think this proportion will decline rapidly when the system goes totally electronic and the doctor tells them if they haven't got a smart phone to get a token it needs to be sent somewhere.
        We live 6-7 miles from our nearest Public Library. Cost in time, convenience, travelling expenses and having a permanent record to refer to it's actually cheaper to buy books on Amazon.

        They do, however, take up space. Earlier this year I took several boxes of books to a local Hospice Shop.

        And, of course, you can guess the rest: there are now several titles I regret parting with and will probably replace.

        I wonder where the Hospice Shop sends them?

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        • #5
          Originally posted by Mutley View Post

          We live 6-7 miles from our nearest Public Library. Cost in time, convenience, travelling expenses and having a permanent record to refer to it's actually cheaper to buy books on Amazon.

          They do, however, take up space. Earlier this year I took several boxes of books to a local Hospice Shop.

          And, of course, you can guess the rest: there are now several titles I regret parting with and will probably replace.

          I wonder where the Hospice Shop sends them?
          Having been in several reading groups over the years this is what a lot of people do. Others feel they should use libraries. I use two libraries for peace and quiet and struck very much how computer use has declined in them rapidly more recently. Like libraries a large part of why my pharmacy survives in its current form is the law and regs. It's very inefficient.

          The voluntary circles I move in tells me a lot of charity shops sell a good proportion of the books on amazon and ebay and the like as I'm sure you are aware. I frequently see volunteering ads for people who will do this and is stated explicitly in the advert.

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          • #6
            Originally posted by mcitr View Post
            Things will become even easier for the hub when the NHS forces its doctors surgeries and other out of hours sites to use EPS.

            Banks is an interesting one to mention. I would mention libraries and post offices.

            Libraries are basically still there at all because they are required to be by law. Compared to 10 years ago many had their hours cut by a lot. Many have closed as well. Where there used to be packed 10 years ago with people using computers now they are mostly empty. All lending is done by a self scan computer. There are librarians but lower staffing levels and if you sit and study all day in a library you will see that librarians are spending their time dealing with issues, referring people to drop in clinics that use the building etc. I think we could become the healthcare equivalent.

            I do think about a third of the 10,000 pharamcies will go in the next few years. I think those that survive will also have their staffing levels cut by a third and ramp up other new services.

            A lot of people are quite anti-EPS and anti-delivery but I think this proportion will decline rapidly when the system goes totally electronic and the doctor tells them if they haven't got a smart phone to get a token it needs to be sent somewhere.
            I never thought about libraries or Post office but if you also look at the number of police stations in operation it has dropped significantly and that is an essential service. If the government show no hesitation to counter the reduction of these services I believe they will do little to sustain branches which the multiples wish to close. This may create opportunity for the entrepreneurial pharmacist but given the dependency on NHS income I would rather get a McDonald's franchise then throw my lot in pharmacy.

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            • #7
              Yes, standard mark up on food is that for something costing £10, ingredient cost is £4.
              johnep

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              • #8
                Originally posted by jzd4rma View Post

                I never thought about libraries or Post office but if you also look at the number of police stations in operation it has dropped significantly and that is an essential service. If the government show no hesitation to counter the reduction of these services I believe they will do little to sustain branches which the multiples wish to close. This may create opportunity for the entrepreneurial pharmacist but given the dependency on NHS income I would rather get a McDonald's franchise then throw my lot in pharmacy.
                You would be miserable managing the staff in McDonald's.

                Best way to make money is hard work and be ruthless. Or corrupt. There are loads of corrupt pharmacy contractors around.

                Comment


                • #9
                  Originally posted by willerz86 View Post

                  You would be miserable managing the staff in McDonald's.

                  Best way to make money is hard work and be ruthless. Or corrupt. There are loads of corrupt pharmacy contractors around.

                  I would take McDonald's any day far more honest than being a pharmacist or contractor. Also McDonalds is a far better business to invest in here are the following points:

                  1) Limited range of products offered therefore the chance of variation is minimised and it is easier to achieve consistency and so therefore both train staff and keep customers happy.

                  2) In McDonald's incorrect order being given to customer does not translate into potential fatality.

                  3) McDonald's offer affordable product which is not at the mercy of the economy so will always be profitable. Also its important to remember if necessary it can hike up its price to cover any excess costs.

                  4) Staff are easier to manage in McDonald's than a pharmacy because staff do not have to learn all the legal and clinical reasons pertaining to OTC and POM and the assembly line is relatively fool proof McDonalds have seen to it to make it as easy and efficient possible to deal with difficult staff.

                  5) Franchise make a decent profit Google it

                  6) McDonalds out of GPhC jurisdiction

                  Comment


                  • #10
                    Don't knock the honesty of the majority of independent contractors. There are always bad eggs whatever the industry/service. The 'Single Handers' and small groups need to work together/consolidate and provide a public and private multi-channel service especially as it is likely more austerity is on the cards because of government ideology and the ridiculous tax regime in UK. There needs to be a 20% flat corporation tax rate for all transaction profits that take place in UK. No negotiation, no allowances, no wiggle room = tens of billions extra tax revenue.

                    Comment


                    • #11
                      The dishonesty is with ALL politicians who have self-interest at the top of their agenda, whatever their politics.

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