13-14 OCTOBER 2024

01 Nov 2023




By Tony Evans, Head of Pharmacy, Christie & Co


Ahead of the Pharmacy Show we launched our Pharmacy Market Review 2023 report which analyses a range of topics relating to the UK pharmacy business market and highlights the opportunities that the current market lends to independent operators and new market entrants. Here are some of our key findings.

As of March 2023, the total number of pharmacies in the UK was 14,328. The sector’s composition is now weighted firmly in favour of regional multiples and independent contractors, whilst those companies operating more than 300 have reduced to circa 35% of the overall market. Between 2022 and 2023, corporate operators saw the most significant decline in pharmacy numbers, with a net loss of 200 stores, while medium-sized pharmacy groups saw a decline of 68 and independently run pharmacies gained 167 pharmacies.

In the first six months of this year, the spread of buyer types was far more even than we have seen in years, with a third of all sales completed to first-time buyers.

Operators continue to face operational challenges with little respite or ability to offset costs within the current funding framework. Whilst gross margin performance has stayed more or less in line with what we recorded in our 2022, recently published accounts show downward pressure on margins by up to two percentage points. This is likely to be felt more keenly by pharmacies that have not developed income through wider services provision. Over this time, contractors continually faced challenges of drug shortages resulting in an impact of supply as well as a significant rise in pricing. As a result, the sector witnessed stark increases in the number of drugs for which price concessions are granted.


Staffing levels continue to mount pressure on the sector, as Pharmacists and qualified staff are lured away to GP surgery and PCN roles under the ongoing Additional Roles Reimbursement Scheme. Data supplied by Locate a Locum shows that, whilst respite in locum costs was aired by some contractors in the first half of 2023, workforce pressures are driving locum rate increases. Between 2022 and 2023, rates across the UK increased by an average of 3.5%. The largest decrease was in Inverness where the hourly rate dropped by 14.8% to £50.91. In contrast, the rate in Cardiff increased the most, by 30.3% to £42.59. Dumfries has the highest hourly locum rate in the whole of the UK, at £51.80, and Belfast has the lowest at £27.38.


In the 12 months to March 2023, dispensing activity increased by 4% in England according to NHSBSA data, with the average volume dispensed by community pharmacies rising to 8,078 items per month. All types of settings saw a rise in dispensing volumes, with standard settings taking the lead with an increase of 5%. By operator type, independent contractors saw the highest volume increases, with independent settings now averaging 8,949 items per month. From a volume perspective, integrated settings continued to lead the way with an average volume of 10,030, followed by health centre adjacent settings returning 9,354, and standard settings averaging 7,529 items.

Dispensing volumes for seven prominent online platforms - Superdrug, Hey Pharmacy, Chemist4U, Boots UK, Lloyds Direct, Well, Pharmacy2U - grew 12%, with just over 32.5 million items dispensed in the 12 months to March 2023, representing 2.6% of the overall items dispensed in the sector. Of this number, Pharmacy2U continues to dominate, dispensing just short of 1.6 million items in March 2023. More recently, the announcement of Pharmacy2U’s acquisition of the second largest online pharmacy, LloydsDirect, will only cement its dominance in the niche area of the market. Data available for July 2023 would suggest that combined, the two dispensed circa 2.67 million items, roughly 2.8% of the overall items dispensed in England.

In the first six months of 2023, asset finance covered one-third of all finance provided by Christie Finance, with a requirement to support the installation of automated dispensing robotics still in strong demand. Activity suggests that many community pharmacies across the UK and Ireland are taking advantage of automation to free up the space, time, and resources needed to handle additional services, become more customer-facing, and grow their businesses.



Looking ahead, 2024 will be a big year for the sector in England, as a new funding package to replace the 2019 Five-Year Deal should be delivered by the sector’s negotiators. The success of such negotiations will no doubt have a huge bearing on the future of pharmacy. It seems inconceivable that the Government can continue to ignore the pressure the sector is facing in its delivery of what must be regarded as one of the most important services to impact the country’s health.


From the sheer volume of delegates that came to meet us on Stand, we remain confident that despite the severe operational challenges contractors are currently witnessing a healthy appetite for pharmacy opportunities remains which bodes well for the market in 2024.

To read the full report, visit: or get in touch with our expert Pharmacy team on 0203 846 0613 or


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