Discount is the new “thing” in pharmacy retail in Australia. Stores screaming discount on their shingle and across the front windows have replaced traditional pharmacies on every secod street, or so it seems.
The pharmacy of yesterday, offering personal service and local knowledge is fading and being replaced by these impersonal barns which use a claim around price as their only point of difference.
In some of these discount pharmacies, the price pitch stops at the door for inside many items are priced the same as you would find in a more traditional pharmacy.
I wonder if this is a trend we will see in the newsagency channel, a group built around a price proposition. It would be challenging to achieve because so much of what a newsagency traditionally sells has a slim margin and is, somewhat, price controlled.
It is interesting to consider whether someone will boldly play the price card because some of the challenges pharmacies face we face too. Much of what they sell is sole elsewhere. There are too many retail outlets. Suppliers are frustrated with lack of discipline The overall shingle will support only so much divergence from the traditional offer.
While I have no interest in a price based offer in the newsagency channel as this would distract from our core unique propositions of community connection and customer service, the question is interesting to contemplate.
It’s a saturated market. Trying to open a chemist group now .. you gotta do something different to be noticed. The discount card is all they’ve really got.
In my local strip there are 3 ‘regular’ chemists, and a 4th discount chemist has just opened. Will be interesting to see how things settle down in the next 2 years.
Perhaps perception plays a part. I mentioned it to someone else and they said chemists take such a good margin that she though good on them for delivering a cheaper product. Eg, small bottle of betadine .. $9.99 at Pulse, $7.50 at discount chemist. That’s significant.
The other question is with motivated staff, why can’t these guys offer personal service and localised knowledge as well? If they pay their staff properly (ie squeezing wages is not part of their cost cutting) maybe they can?