29 May, 2019
The analytical company Marketing Logic has prepared a prediction on the basis of Big Data and geodata for closing branches of pharmacies in case of enforcement of the bill of the Ministry of industry and trade on the sale of medicines in supermarketsand grocery stores. Up to 25.5% of pharmacies can be closed in the country.
The bill of the Ministry of industry and trade opens up opportunities for the grocery retail to sell medicines on store shelves. This can create more competition to pharmacies, when the struggle for customers will be happen not only between the pharmacies themselves, but also between pharmacies and supermarkets. With the help of location intelligence technology, experts analyzed the probability of closing branches of pharmacies in the country. In the risk zone are pharmacies, located in close proximity to supermarkets and other large points of grocery retail.
«We aggregated data on pharmacies of a certain brands and pharmacies in general, as well as on the location of retail outlets, assessed the potential and load. Usually we calculate the performance of potential offices and retail outlets on the basis of data on customer activity, competing organizations, population, traffic on the streets and other statistical information. In this study, we looked how these same factors will affect the profitability and the potential closure of pharmacies », says Dmitry Galkin, managing partner of Marketing Logic.
Among the cities with a population of more than 150 thousand people, the largest number of pharmacies which are under the risk of closing are located in Yoshkar-Ola, Saransk, Norilsk, Nizhnekamsk, Pskov, Dzerzhinsk, Bratsk, Sochi, Lyubertsy, Chelyabinsk. Then follow Korolev, Saratov, Khimki, Balashikha, Kazan, Almetyevsk and Krasnoyarsk.
The least chances for retail to intercept the flow of buyers of pharmaceutical products are in Blagoveshchensk, Syktyvkar, Kostroma, Armavir, Novgorod, Omsk, Vologda, Kolomna, Perm and Petrozavodsk.
« Indeed, many pharmacies are at risk of closure if this initiative is adopted. In this case, we see decrease of the availability of medicines for the population, because Retail will not be interested in selling low-margin medicines, pharmacies will be closed, accordingly, these medicines will simply not be found. At the same time, the prices of medicines will rise for the final buyer. The increase in prices for prescription drugs, according to the optimistic forecast, will be about 11%, but there is a risk that prices will grow by more than 15% », says Nelly Ignatieva, executive director of the Russian Association of Pharmacy Chains.
"There are more than 60 thousand pharmacies in Russia and their number is increasing. This extensive network of pharmacies provides high availability of medicines to the population-on average, pharmacies are open until 21: 00, there is also no shortage of pharmacies on duty. The entry into force of the bill on the sale of medicines in supermarkets undoubtedly creates discriminatory conditions for all pharmacy chains. This threatens a sharp reduction in the profitability of pharmacies and contrary to expectations will not lead to a decrease in prices in the market, but to their growth. The exclusion from the sales chain of a specialist with higher education — a pharmacist who controls the process of medicines release and can give the customer a professional recommendation, also entails significant risks, primarily for the health of Russians who already love to self-medicate and buy medicines on the recommendation of friends or TV. So it is also a security issue," explains Executive Director of the Association of independent pharmacies Victoria Presnyakova.
The TOP 20 pharmacy chains, which are at risk of losing the largest number of outlets, include major Federal players: Vita-Express, Zdorov.ru, Ozerki, Aloe-Pharm, First pharmacy, Vita-Pharm.
The least reduction potential pharmacies may affect the network: Kubanpharmacy, Gubernskie Apteki, Vita-Plus, Nevis, New pharmacy.
The largest players of the Russian market of pharmacy retail "Rigla", "ASNA", "36.6", "April", "Melody of health", "Samson-Pharma" are closer to the middle of the rating. The least stable position of the " big six "in the network" 36.6", which is closest to the leaders of the potential closure of the points.
If the bill is adopted in the whole country, more than 25.5% of pharmacies can be closed, i.e. more than 16,000 in absolute figures.
Among the largest retail chains with more than 1000 outlets in the country, the most benefit from the redistribution of demand will be the stores of the Dixie retail network, which has the greatest potential of the average point of the network to attract customers from the redistribution of demand. In second place is the "Pyaterochka", the third is – "Magnet". "Supermarket Magnet"and the network "Victoria" close the TOP 5.