Pharmacy Daily | Sigma: 60-day rule to hit store traffic

SIGMA Healthcare says it's still too early to assess the knock-on effect of the Government's budget decision to facilitate 60-day dispensing on more than 300 medicines, but has pledged to "continue to support our customers and work on initiatives to drive efficiency across the supply chain".

Speaking at the Sigma annual general meeting yesterday, CEO Vikesh Ramsunder (pictured) noted that the significant change in policy "will impact the funding for pharmacies and most likely decrease foot traffic into stores".

The Sep phase-in of the measure will "allow us time to manage the potential impact," he said, adding that the company was working with its brand members and supply chain to mitigate any outcomes from the radical new policy.

Ramsunder also addressed the recent decision to rationalise Sigma's brand portfolio which has resulted in the demise of Guardian Pharmacy, in favour of Amcal and Discount Drug Stores.

"The rationale for moving to two brands is the following: firstly it removes the complexity of managing promotional and marketing strategies for five brands.

"Secondly, consolidation provides scale to deliver the economics of a private and exclusive label strategy; and thirdly it allows us to focus on our brand positioning and consumer messaging to increase footfall through our stores," he said.

Ramsunder also noted that some pharmacists do not wish to belong to a brand, "and for these stores, we have launched our PriceSave offer to grow our wholesale volume".

He also highlighted the broader economy and ongoing inflationary pressures on operating costs, with the company having a limited ability to pass on cost increases.

"With that said, we also operate in more defensive categories less impacted by swings in spending patterns of consumers."

Ramsunder said sales into pharmacies for the current financial year to date were up 5.3% due to improved operational performance.

Sigma's key "delivery in full" metric, which is a critical measure for customer satisfaction, rebounded from 75% in Feb 2022 to a sustained 98% and above since Jun last year, which he noted was a "strong turnaround considering we still delivered over 230 million units in the year to pharmacies".

"I now have great confidence in the sustained ability of our operations to meet high levels of customer service and absorb growth opportunities," he said.