‘People’s habits change quickly... that’s what keeps me awake at night’

Pharmacies are struggling with reduced turnover and increasing Covid-19 costs

Liam Butler, owner of Haven Pharmacy in Birr, Co Offaly: ‘I cannot see us getting back to where we were until after the next flu season. 2020 is a write-off for a lot of pharmacies’

Liam Butler, owner of Haven Pharmacy in Birr, Co Offaly: ‘I cannot see us getting back to where we were until after the next flu season. 2020 is a write-off for a lot of pharmacies’

 

“This is the most difficult six or seven weeks that any of my family have experienced in the business,” says Liam Butler, a third-generation pharmacist in Birr, Co Offaly.

Butler, whose family have run the Haven Pharmacy in the Offaly town for 85 years, says front-of-shop sales are down 31 per cent over recent weeks, with sales of beauty and cosmetic items in particular 72 per cent weaker since the crisis began. He has a 2,000sq ft premises; now, shoppers can access only about 200sq ft.

For a business that relies on non-prescription sales for 45 per cent of turnover, it’s a substantial blow.

“You have to have prescriptions to drive footfall and traffic into the store,” he says, “but it is the other side that drives the real profit in a business.”

While, like others, he has incurred additional costs, it is the loss of revenue that concerns him.

“One of the things is that people’s habits change very quickly,” he says. “If they move online for their supplies, how much of that business will come back? That is what keeps me awake at night.

“I cannot see us getting back to where we were until after the next flu season. 2020 is a write-off for a lot of pharmacies.

“The staff are fantastic. Many have been with me a long time and we consider ourselves to be at the frontline of health. They’ve been excellent,” he says. “But if this is extended to the end of the summer or into the autumn, I have no doubt that I would have to be having those conversations with staff that I don’t want to have.”

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Sharp drop

He is not alone. Increasing costs to meet new social distancing requirements, as well as a sharp drop in the sale of non-prescription items which contribute significantly to profits for chemists, is putting many businesses into a perilous financial position, the Irish Pharmacy Union (IPU), which represents 1,900 pharmacies across the State, has found.

Some pharmacies are having difficulty accessing key medicines as they juggle higher costs and lower sales as a result of the Covid-19 crisis, according to a new survey by the IPU.

It showed that one in five pharmacies have laid off staff, while another 38 per cent say that they will be forced to so in the next two to three months.

A quarter of pharmacies have reached their credit limit with medicine wholesalers, in a move that affects their ability to purchase further supplies, while many more have had to defer payments to creditors, restructure loans, or expand overdraft facilities, the IPU survey says.

“Worryingly, 30 per cent of respondents indicated that they had difficulty in ordering key medicines for patients due to reaching their credit limit,” the industry group said.

That hasn’t been an issue for Butler. But he notes that many pharmacies did struggle to access drugs – especially back in late March as patients on long-term medication tried to stockpile ahead of the lockdown.

“I supplied medicines to a colleague who had gone through their credit and could not extend that credit,” he says.

Burdened

And those who have come into the business more recently and are burdened with debt associated with setting up in business are finding it particularly stressful, he says.

Day-to-day operating costs have dramatically increased for pharmacies, with staff costs, as well as additional security, delivery and sanitisation costs, adding an average of €5,000 a month to costs. That, the IPU says, equates to almost €10 million a month across the sector.

It comes as restricted access means retail sales in pharmacies have dropped dramatically, with falls on average of 36 per cent across the sector, according to the survey.

Three-quarters of all pharmacies expect they will have to spend further to reconfigure their premises or practices for when the current restrictions on movement are lifted.

“Pharmacists are at the frontline of our healthcare system,” said IPU secretary-general Darragh O’Loughlin. “As the various Covid-19 restrictions have been implemented, pharmacies have remained open to provide their communities with an uninterrupted supply of medicines, service and advice, but this has come at an unsustainable cost to many.”

He noted that Minister for Health Simon Harris had said he is looking at ways to support pharmacies in their work, but added that nothing has yet happened on that front.

“If the additional costs continue at the levels currently experienced and urgent Government support is not forthcoming, some pharmacies will have to dramatically curtail their opening hours or close completely,” he said.