Be realistic – Pharmabroker
December 13, 2010
PHARMACIES need to apply
“realistic” mark-ups on goods
which are also available through
supermarkets, according to Stewart
Bowen, the managing director of
Pharmabroker sales.
Bowen has written to PD in
response to an article on 12
November in which Kelly Lash of
Cane Fire Pharmacy in Qld urged
wholesalers and manufacturers to
assist pharmacy to compete by
offering bigger margins.
The Pharmabroker chief said that
pharmacists need to be aware of
the current price war going on in
grocery, including 50% off deals on
many major brands, “all driven and
funded by Coles and Woolworths.
“They are targeting Pharmacy,”
Bowen said.
Manufacturers want Pharmacy to
be a strong channel, with the
supermarket giants continuing to
develop house brands.
However Coles and Woolworths
don’t need to warehouse products
to the same level as required in
pharmacy, so they save the markup
incurred through
pharmaceutical wholesalers, which
adds to pharmacy costs.
However Bowen insisted that
pharmacy is not disadvantaged on
pricing, with most manufacturers
offering “parcel buy discounts”
which, based on quantity
purchases, allow pharmacy to be
competitive with other channels.
Bowen also pointed out that there
are significant costs for
manufacturers selling through
pharmacy, including advertising for
catalogues, operating
merchandising and sales forces,
providing point of sale material as
well as category reviews for
wholesalers and banner groups,
and “these service levels all cost
money,” he said.
“In summary, Pharmacy has a
future with front of shop products,
provided reasonable margins are
observed, ranging of market
leaders, sections are
planogrammed and off location
displays are enticing to consumers -
plus the all important aspects of
good staff and a good advertising
campaign,” Bowen concluded.
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