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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

The UK market for retail chemists and drugstores is complex, in terms of both the range of products sold and the number and type of retail outlets. At 12,236, the number of outlets is relatively static, but this masks fundamental changes that are taking place in the market. Around 41 percent of retail outlets are now owned by large chains, such as Lloyds Pharmacies and Moss Chemists, the chains themselves being owned by the two largest pharmaceutical wholesalers in the UK -- AAH Pharmaceuticals and Alliance Unichem. The small independent community pharmacies are also increasingly likely to belong to a trading organisation, such as Numark.
Penetration by overseas companies is becoming increasingly evident. AAH Pharmaceuticals is owned by the German company, GEHE, while Alliance Unichem is owned by the Italian company, Alliance Santé.
Another aspect of change is the increasing influence of the multiple grocery chains. Tesco now has 201 in-store pharmacies, followed by Safeway and ASDA, and delays over the decision on resale price maintenance (RPM) are unlikely to reverse this trend. The proposed merger between ASDA and Kingfisher PLC, which owns the Superdrug chain, is likely to have a significant effect on retail distribution, particularly as it has been seen as a defensive move to prevent the US retailing giant, Wal-Mart, from gaining entry to the UK market.
Health and beauty outlets are increasing, as drugstore chains such as Superdrug reposition themselves upmarket. However, many of these products are increasingly sold in supermarkets and other retail outlets.
In 1998, market value was estimated £16.67bn, up 7.6 percent on 1997. The largest sector was toiletries, accounting for 46 percent of sales, followed by prescription drugs (37.6 percent) and medical products and over-the-counter (OTC) pharmaceuticals (16.4 percent). Prescription drugs comprise the fastest growing sector, achieving annual growth of 9.3 percent in 1998. This was despite Government attempts to curb expenditure and encourage savings through the greater use of generic medicines. Medical products and OTC pharmaceuticals comprise the slowest growing sector, with sales rising by 6 percent in 1998. This reflects increasing price sensitivity and growing competition in the marketplace.
Market value is projected to rise by an annual average of 7.7 percent between 1999 and 2004, to reach £25.98bn. Prescription drugs are forecast to maintain growth of around 9 percent per year, with sales reaching £10.54bn in 2004. This will reflect rising demand from an ageing population, as well as market expansion through new and better treatments. Sales of toiletries will rise by an average annual 7 percent, reaching £11.5bn by 2004. Medical goods and OTC products are projected to continue growing by between 6 percent and 7 percent a year, to reach £3.94bn by 2004.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

PRODUCT DEFINITIONS

MARKET POSITION

MARKET TRENDS

Table 1: Per Capita Sales of PharmaceuticalsÅ by Country (£), 1997

Market Size

THE TOTAL MARKET

MARKET SECTORS

Table 2: Total Sales of Retail Chemist and Drugstore GoodsÅ in the UK (£m and percent), 1993-1998

Table 3: The Total UK Market for Retail Chemist and Drugstore Goods by Sector (£m), 1993-1998

Table 4: The Total UK Market for Retail Chemist and Drugstore Goods by Sector ( percent), 1998

Table 5: Retail Chemist and Drugstore Sales of ToiletriesÅ (£m and percent), 1993-1998

Table 6: Retail Chemist and Drugstore Sales of Prescription Drugs (£m and percent), 1993-1998

Table 7: Retail Chemist and Drugstore Sales of Medical Goods (£m and percent), 1993-1998

Industry Background

RECENT HISTORY

REGULATION

INDUSTRY CONCENTRATION

TRADE ASSOCIATIONS AND INDUSTRY ORGANISATIONS

EXHIBITIONS AND CONFERENCES

Table 8: Prescriptions Submitted to the PPA by Source (million and percent), 1997/1998

Table 9: Total Number of Prescriptions in England (million) 1993-1998

Table 10: Number of Registered Retail Pharmacies in the UK, 1990-1997

Table 11: Profile of Pharmacy Size in England by Number of Prescriptions Per Month ( percent),1996/1997

Table 12: Pharmaceutical Exhibitions and Conferences, May-December 1999

Competitor Analysis

THE MARKETPLACE

WHOLESALERS

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 13: Market Leaders in the Retail Chemists and Drugstores Market by Turnover (£m), 1997/1998

Table 14: Major Retail Pharmacy, Drugstore and Supermarket ChainsÅ by Number of Outlets, 1998/1999

Table 15: Main UK Pharmaceutical Wholesalers by Turnover (£m), 1997

Table 16: The Body Shop International PLC - Financial Results (£m), Year Ending 1st March 1996-28th February 1998

Table 17: Boots The Chemists Ltd - UK Stores (number of outlets), 1999

Table 18: The Boots Company PLC - Financial Results (£m), Year Ending 31st March 1996-1998

Table 19: Lloyds Pharmacy Ltd - Financial Results (£m), Year Ending 31st December 1995-1997

Table 20: AAH Pharmaceuticals Ltd - Financial Results (£m), Year Ending 31st December 1995-1997

Table 21: Alliance Unichem PLC - Financial Results (£m), Year Ending 31st December 1995-1997

Table 22: E Moss Ltd - Financial Results (£m), Year Ending 31st December 1995-1997

Table 23: Superdrug Stores PLC - Financial Results (£m), Year Ending 3rd February 1996-31st January 1998

Table 24: WR Evans (Chemist) Ltd - Financial Results (£m), Year Ending 31st July 1996-1998

Table 25: Main Media Advertising Expenditure by Retail Chemists and Drugstores/Health and Beauty Stores (£000), Year Ending December 1997 and 1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

POPULATION TRENDS

HEALTH PROBLEMS AND MORTALITY

THE HEALTH SURVEY FOR ENGLAND

SPENDING PATTERNS

Table 26: Past and Projected Population of the UK by Age Group (million and percent), 1961-2021

Table 27: Deaths in the UK by Major Cause (000), 1996 and 1997

Table 28: Average Weekly Household Expenditure on Health and Personal Care (£), 1997/1998

Outside Suppliers to the Industry

THE PHARMACEUTICAL INDUSTRY

PERSONAL CARE COMPANIES

Table 29: The Top Five Pharmaceutical Companies' Pharmaceutical Research and Development Expenditure (£m), 1997

Current Issues

PRESCRIPTION-ONLY MEDICINE TO GENERAL SALES LIST SWITCHES

PACK SIZES

ELECTRONIC PATIENT RECORDS

SMOKING

VIAGRA

NATIONAL HEALTH SERVICE DIRECT

PHARMACY CRIME

NHS PRESCRIPTION FRAUD

LEGAL ISSUES

CORPORATE ISSUES

Forecasts

INTRODUCTION

FORECASTS 1999 TO 2004

SECTOR FORECASTS

Table 30: Forecast Sales of Retail Chemist and Drugstore GoodsÅ (£m and percent), 1999-2004

Table 31: Forecast Chemist and Drugstore Sales of ToiletriesÅ (£m and percent), 1999-2004

Table 32: Forecast Chemist and Drugstore Sales of Prescription Drugs (£m and percent), 1999-2004

Table 33: Forecast Chemist & Drugstore Sales of Medical Products and OTC Pharmaceuticals (£m and percent), 1999-2004

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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