Small pharmacies near CWH stores in Auckland ‘severely impacted’

Chemist Warehouse Woden, September 2013.
Chemist Warehouse believes there is not enough competition under the current pharmacy model.

Chemist Warehouse is eating into small pharmacies’ earnings in New Zealand, according to local media

With five Chemist Warehouse stores in Auckland, New Zealand so far, local pharmacies are reportedly feeling the impacts.

This month, the New Zealand Herald has reported that “small pharmacies located near and around Chemist Warehouse stores in Auckland have been severely impacted by the Australian retail giant’s booming trade”.

“This has particularly been the case for pharmacies trading in the Albany and Botany areas,” writes business reporter Aimee Shaw.

However no pharmacies the Herald approached were willing to talk about the impact.

Green Cross Health, the company which operates chain pharmacies Unichem and Life Pharmacy, would not say whether Chemist Warehouse had impacted its business but acknowledged the competitive market to the Herald.

“Retail is an increasingly competitive market and over the last 18 months we’ve seen many changes locally including new entrants with pharmacy, grocery and beauty providing more choice for customers,” group manager Debbie Yardley said in a statement.

Chemist Warehouse opened its first New Zealand store in St Lukes, Auckland, in late 2017.

More than 90% of New Zealand pharmacists at that time said they were worried about disruption to the industry posed by Chemist Warehouse, Amazon and deregulation, according to a survey by business advisory and accountancy firm BDO.

In mid-2018 the discount pharmacy chain set up its second New Zealand store in the Auckland suburb of Botany, next door to the Unichem Maxx pharmacy.

When the upcoming opening was announced, readers of New Zealand pharmacy publication Pharmacy Today turned to Facebook to express their dissatisfaction.

“Isn’t there a law in place that prevents this from happening?” wrote reader Amy.

“There should be but there isn’t,” replied Fadiya.

The Botany store was followed by three more openings including in Manukau and Westgate, all in Auckland—and Chemist Warehouse has reportedly shared its strategy to open 70 stores throughout all major cities across the country.

Chemist Warehouse debuted in New Zealand offering free prescriptions, with one pharmacist warning that “pharmacies could lose millions in turnover if they copied the Chemist Warehouse.

“It would especially be a big hit for small businesses. Some that do it may fall by the wayside.”

New Zealand Doctor reported that Auckland pharmacies were dropping script prices in response to the competition.

Late last year, a Kiwi journalist also reviewed Chemist Warehouse while it was still a new entrant to the market with an article entitled “Chemist Warehouse is pure hell and I love it”.

“The St Luke’s branch of the Australian discount chain celebrated its opening last year with a bright yellow hot air balloon tied to the roof, suggesting it had either crashed down from the heavens or ascended from the bowels of hell,” Alex Casey wrote in The Spinoff.

“The interior is overwhelming and technicolour, plastered with DISCOUNT PRICE flyers and FREE BLISTER PACKS with any purchase. Free!?! What even is a blister pack?! I’ll take 10,” she wrote.

“Aside from the bargain pricing, the big drawcard is the free prescriptions. Great news for the glassy-eyed customers, bad news for all the local family-run pharmacies.

“But it’s not the even free prescriptions that lure me in. It’s everything else. Chemist Warehouse is the grim casino of self-improvement, roping in the vulnerable through rotating jackpot skin cream deals, crow’s feet negging and the eternal promise of a better tomorrow.

“And, of course, the blister packs.”

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