Pharmacies are feeling the pain
Centenary: Tidings were not all upbeat as Sigma Pharmaceutical celebrated its 100th birthday.
RETAILING in Australia is as tough as it's ever been, according to the owner of Amcal and Guardian chemists, as Sigma Pharmaceutical pushes into e-commerce and greater use of its 1.7 million-strong loyalty cards.
Sigma managing director and chief executive Mark Hooper said a sharpened retail offer presented opportunities for pharmacists juggling government cuts to the Pharmaceutical Benefits Scheme, a ''much more informed'' customer, and stiff competition in fast-moving consumer goods from supermarkets and other retailers.
''The general retail climate is obviously quite negative, but our view would be that retail within pharmacy has not been in the same level that the rest of retail in Australia has been at, and probably even further behind what's happening in best-practice retail around the world,'' Mr Hooper told BusinessDay.
''So even though the retail space is probably more challenging than it ever has been at the moment, because pharmacy hasn't been a consistently good performer in that space, we still think there's upside for our pharmacist customer if they can get a better offering for consumers.'' About two-thirds of pharmacy revenue comes from medicine sales.
Speaking as Sigma celebrated its 100th birthday, Mr Hooper said another area for focus was boosting sales of its private-label medication from 5-6 per cent, noting that between 30 per cent and 40 per cent of sales by UK chemist Boots were private label.
Analysts are taking note of Sigma's greater push into retail, noting that Mr Hooper had earned his stripes by reforming the company after its near-death experience a couple of years ago. ''It's a step in the right direction, and it's an area where Sigma hasn't historically focused too much on,'' one analyst said.
Mr Hooper also flagged a review of the Sigma board - which has been criticised by the Australian Shareholders Association as being over-paid and over-burdened with other directorships - in the next year or so, and reiterated Sigma was ''very comfortable'' it could defend a proposed class action related to its disclosures before a shock loss during the financial crisis.