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The Pharmacy Market Report 2018

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Irish consumers will spend over €1.2 billion this year in pharmacies, rising to €1.4 billion by 2022

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The Pharmacy Market Report 2018

  1. 1. The Pharmacy Market An Amárach Research Report © Copyright Amárach Research, 2018
  2. 2. Irish consumers will spend over €1.2 billion in pharmacies in 2018, a number set to grow substantially over the next few years. This Amárach report looks at Irish pharmacy customers, and explores the key drivers of growth for beauty, health and medical products and services through pharmacies. The data in this report draws on Amárach’s proprietary PlanR business intelligence dashboard and database. Every month we poll 1,000 different adults for PlanR, adding up to 12,000 interviews every year, including 11,000 pharmacy customers in 2017 alone. 2 The Irish Pharmacy Market
  3. 3. 3 Pharmacy customers are generally very loyal, which is why Irish pharmacies enjoy a more positive Net Promoter Scores as a category versus many others. Of course, NPS scores vary considerably by pharmacy brand within the sector. ‘Local independent’ pharmacies score highest as a sub-category (NPS of +22 on average in 2017), followed by Boots (+13), then by Sam McCauley (-3). The average pharmacy customer spends €37 a month on a mix of beauty, health and medical products. Over 55s spend most (€45 a month), indicating how important an ageing population will be to the future growth of the sector. Pharmacy Trends Source: Amárach Research PlanR database 2015-2017 Average Net Promoter Scores: Selected Retail Categories -25 -20 -15 -10 -5 0 5 10 15 20 25 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 NPS Supermarkets NPS PharmaciesNPS Petrol Stations
  4. 4. 4 Pharmacy Profiles Source: Amárach Research PlanR database 2017 Demographic profiles of customers of different pharmacy brands: 2017 All Adults Boots Lloyds pharmacy Sam McCauley McCabes pharmacy Local independent pharmacy Sample 11,999 3,697 663 545 462 3,703 Male 49% 41% 50% 47% 49% 51% Female 51% 59% 50% 53% 51% 49% 16-24 15% 24% 17% 17% 17% 7% 25-34 20% 26% 22% 26% 26% 11% 35-44 19% 22% 20% 17% 23% 16% 45-54 16% 13% 14% 16% 11% 21% 55+ 29% 15% 28% 23% 23% 44% Dublin 28% 35% 45% 16% 63% 18% With children under 17 35% 38% 40% 37% 39% 32% With children over 17 34% 21% 31% 33% 28% 50% Has medical card 40% 35% 39% 45% 35% 47% Does not have medical card 60% 65% 61% 55% 65% 53% Many consumers shop with more than one pharmacy brand, but our research focus is on their ‘main pharmacy’. On this basis, local independent pharmacies as a ‘group’ have the dominant market share (weighted by spend) at 34% in 2017. Boots is second at 30%, followed by Lloyds Pharmacy at 7%. Of course, this does not reflect the share of outlets, simply where consumers commit most of their pharmacy spend. Nor does this mean consumers buy all their beauty or health products in pharmacists, for example: 23% of Irish women buy cosmetics online, including 22% of Boots customers.
  5. 5. 5 Six in ten pharmacy customers have actually recommended their main pharmacy to a friend or family members. Those belonging to loyalty programmes run by their pharmacies are much more likely to make a personal recommendation. That said, typically 1 in 5 pharmacy customers think it likely they’ll switch their main pharmacy in the next 6 months. But there are other influences on pharmacy loyalty and spending. The chart shows that a minority of pharmacy customers are highly influenced by their digital interactions with pharmacies, while interactions with staff – and price/value perceptions – are major influences for the majority of customers % pharmacy customers saying each factor is important influence Pharmacy Influences Source: Amárach Research PlanR, January 2018 Your pharmacy has the lowest prices or charges Interactions with staff when deciding to continue as a customer of your pharmacy Dealing with your pharmacy digitally through their website and/or social media 61% 60% 18%
  6. 6. 6 The pharmacy sector is one of the retail categories currently enjoying a strong growth trend, though turnover has yet to return to 2010 levels1 . Our estimates exclude payments to pharmacists through the HSE’s Primary Care Reimbursement Service (PCRS), worth €1.3 billion in 20162 . Nevertheless, a more affluent, ageing population will undoubtedly drive demand for the key product lines traditionally associated with pharmacies: health & beauty, OTC medicines and prescription medication. Our forecasts assume a rate of growth slightly faster than overall consumer spending, though this in turn assumes pharmacies will successfully pivot to a more ‘experiential’ retail offering in future as they face the digital challenge. Pharmacy Futures 1 goo.gl/svpkP3 2 https://www.sspcrs.ie/portal/annual-reporting/report/annual Value of spending in Irish pharmacies: € billion 2018-2022 €0.00 2022 2021 2020 2019 2018 €1.20€1.10€1.00 €1.30 €1.40 €1.50 €1.24 €1.28 €1.32 €1.37 €1.41 Source: Amárach Research forecasts, 2018
  7. 7. 7 Irish pharmacies have a unique opportunity to play a key role in meeting the health and wellbeing needs of Ireland’s population in the years ahead. But not all will succeed: those that cling to outdated retail formats and service offerings will be bypassed by brands championing ‘clicks & bricks’ solutions. Amárach will continue to invest in understanding and sharing its insights into the Irish pharmacy customer, focusing on opportunities for sustainable and significant growth for its clients. Pharmacy Opportunities
  8. 8. Read our ‘Seven Reasons to use Amárach’: https://amarach.com/ “We believe in helping our clients succeed & grow through a better understanding of their customers’ needs.” 8 777 Get in touch: 11 Kingswood Business Centre, Dublin D24 KT63 T. 01 410 5200 E. info@amarach.com W. amarach.com © Copyright Amárach Research, 2018 Find out more

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