Noel Baumber, Barrowbygate pharmacy
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Incentives in the community pharmacy contract in England and Wales have
led many businesses to install a consultation area. In addition to construction
costs, this invariably involves the rearrangement of store layout, often
sacrificing floor space with an associated risk of reduced income from
retail sales.
While the larger multiples may have ways of balancing these risks, independent
pharmacists may be wondering if they can afford to do it.
Currently 1,300 Boots the Chemists stores have a consultation area of
some description (which may be a booth or a screened off area) and 500
stores have a separate consultation room. Using the recent refurbishment
of a store in Leamington Spa as an example, a spokesperson for Boots
says that no stock lines have been reduced after the refit; rather, more
lines have been introduced. This has been achieved by reorganisation,
better use of wall space and ergonomic display units. However, she acknowledges
that they had a large floor space to start with.
Jonathan Buisson, NHS strategy manager at Alliance Pharmacy, commented
that at Alliance the decision to reduce any stock lines would be at the
discretion of the branch and area manager, but that using the space for
providing extra services, such as medicines use reviews and smoking cessation
services, would bring in as much revenue as the loss of retail space.
Alistair Buxton, head of NHS services at the Pharmaceutical Services
Negotiating Committee points out that although it may appear “easy” for
the larger stores to install consultation areas, they still have to make
a robust business case since all store space is assessed for how it will
generate maximum profit.
Based on 2006/07 contract figures, community pharmacists can now carry
out 400 MURs per year, generating £10,000. Ash Soni, an independent
community pharmacist from Streatham, London, has installed a consultation
area at a cost of about £10,000. To make room for this he cut back
on stocking some items such as toiletries, but says that sales of these
items were already falling because of competition from supermarkets.
Mr Soni points out that to make £10,000 profit from sales he would
have to sell £40,000 stock. “The main problem is the initial
cost of putting the consultation area in,” he explains, “After
that, the revenue generated from MURs is greater than sales from that
square footage”.
Mr Buxton adds that 85 per cent of the average independent pharmacy’s
turnover is linked to NHS services, with just 15 per cent coming from
sales, including over-the-counter medicines. However, he notes that not
all small pharmacies have electronic point of sale systems that help
them calculate which areas of the business generate the most income.
Noel Baumber, an independent pharmacist from Grantham, Lincolnshire,
spent about £2,500 building a consultation area (see picture),
which he also uses to stock items relevant to private consultations,
such as hosiery. He says that rather than losing out on retail sales,
he has seen the opposite. “Having a private place to show customers
the range of incontinence products, for example, has significantly increased
the sales of these items”.
Rather than wondering if they can afford to build consultation areas,
it appears that pharmacists should be asking themselves if they can afford
not to.
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The
Pharmaceutical Journal