A combination of an ageing population and changing consumer trends are leading to pharmacies increasingly being used as the first port of call for healthcare and primary care services, the reports says. Initiatives to move primary healthcare services out of GP surgeries and into communities will also fuel the growth.
The UK's pharmacy sector has grown by 75 per cent in the past decade and outperformed total UK retail growth in nine out of those 10 years. Average pharmacy revenues now exceedÂŁ1 million and spend per head on NHS receipts, including both primary healthcare services and prescriptions, has grown byÂŁ89 toÂŁ208 in the decade to 2005.
The retail pharmacy market is valued atÂŁ12.8 billion, more than the homewares market, which is worthÂŁ10.9 billion. Alliance Boots and Lloydspharmacy still dominate, holding more than a third of the total market.
According to the report, the demands of a new pharmacy contract, combined with the need to run a profitable business, favour larger chains rather than small independents.
Verdict Research analyst Maureen Hinton said: 'Apart from the savings that can be made in administration and operating costs, large businesses have the advantage of scale in IT implementation, best practice sharing, services marketing and contract negotiations for enhanced services.
'These factors are encouraging the continuation of the consolidation trend and reinforcing the desirability for independent pharmacists to belong to an affiliate group.'
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