The volume of pharmacy sales are likely to “remain high” in the new year, sector broker Hutchings Consultants told C+D on Wednesday (December 20).
Predicting what could happen with the pharmacy market in 2024, Hutchings director Scott Hayton told C+D that he was expecting that “both the corporate and independent group operators” will be “reassessing their pharmacy portfolios and making strategic disposals of varying sizes”.
Read more: Goodwill valuations: How much is my pharmacy really worth?
However, Mr Hayton said that “overall” the broker did not expect to see an increase in “pharmacy goodwill prices” – the value of a pharmacy primary calculated by its profitability – unless “either the supply and demand situation within the market is re-addressed or a more significant uplift in funding can be secured”.
“Positive sentiments”
Mr Hayton said that lower customer price inflation “following three months of the Bank of England holding fast on interest rates” means that pharmacies “may finally start to see interest rates start to fall partway through 2024”.
“This will help to relieve some financial pressure from existing operators and should help buyers generally with affordability,” he added.
And he said that other “positive sentiments” for the new year include the roll out of England’s Pharmacy First service.
Read more: Independent buyers snap up six southeast pharmacies
He called the service, due to launch across England at the end of January, “a step in the right direction” that is “likely to bring a degree of renewed confidence to the sector”.
However, Mr Hayton said that “perhaps the most notable opportunity for the sector to capitalise on in 2024 is the upcoming community pharmacy contractual framework (CPCF) negotiations”.
He added that the contract would be a “chance for the sector to secure a vital uplift… after the effects of such high inflation”.
And he said that the “it also seems fairly certain that we will see a general election” in the autumn of 2024, which he predicted “may bring some favourable outcomes for the sector”.
Swathe of 2023 closures
This year saw the number of small chains overtake that of large multiples.
Last month, C+D confirmed that Lloydspharmacy, which in March was the second-largest community pharmacy multiple in the country, had exited the high-street completely following the "successful sale" of all its branches.
Read more: Lloydspharmacy confirms 'successful sale' of all community pharmacies
Meanwhile, financial documents published in November revealed that Rowlands suffered a 500% increase in losses for the 2022/2023 financial year and had taken on a “close, merge, dispose” strategy.
And in July, Boots announced the closure of 300 of its branches over the next year.
