Press Releases

Christie & Co reports positive pharmacy market activity in 2022

Specialist business property adviser, Christie & Co, has today launched its Business Outlook 2023: Finding Clarity report which reflects on the themes, activity and challenges of 2022 and forecasts what 2023 might bring across the industries in which Christie & Co operates in, including the pharmacy sector.

Business. Built around You.

Your expert business property advisers

Christie & Co | Business Outlook 2023 report

Despite continued pressures in the sector and the wider economy over the course of 2022, Christie & Co reports positive levels of activity in the pharmacy market, with competitive bidding for quality businesses in areas of low supply, an average pricing increase of 0.7 per cent last year, and many pharmacy contractors expanding their businesses both through acquisition and the development of additional services. The broker sold 105 pharmacies in 2022, which had a combined value in excess of £90 million.

Of those interested in acquiring a pharmacy business last year, the majority (80 per cent) were first-time buyers, 10 per cent were independent contractors looking to expand, and the remaining 10 per cent were a mix of small, medium, and national multiple operators. However, this did not directly correlate with sales activity, with only 23 per cent of sales concluding to first-time buyers last year, as vendors sought the security of selling to more experienced and well-funded operators. Bank portfolio valuations, coupled with single asset valuations, increased significantly during 2022, and this appears to be unabated as we move forward in 2023.

Deal activity in 2022 was brisk, with Christie & Co reporting a 12.5 per cent increase in deals agreed in 2022 compared with 2021, and an average of three offers per pharmacy sold, a figure slightly ahead of 2021 figures. Deal times also shortened, with an average of 32 weeks between a deal being agreed to its completion. As in previous years, although appetite was witnessed across all four country regions, Christie & Co saw strong activity across Scotland, the North East of England, and South East of England, in particular.

The broker highlighted that a number of corporate operators have implemented disposal strategies of late, offloading significant volumes of pharmacies in certain areas. Although this additional supply to the marketplace may appear to give buyers more choice, the conditions and liabilities that may accompany some such sales will mean that prospective purchasers who are either new to the market or are reliant on funding to support acquisitions may find acquiring challenging. However, the increased supply does create a strong opportunity for acquisitive, experienced operators with good track records and funding support.

Key Sector Challenges

Whilst there has been little impairment or distress in the sector to date, like many, it faces several headwinds that may create a more challenging trading environment over the coming year.

The pharmacy sector continues to endure cost pressures as a result of increasing drug prices alongside staff retention, recruitment issues, energy prices, and interest rate increases. With the flat funding model introduced in 2019 under the Department of Health and Social Care’s Five-Year Deal, the inflationary issues currently witnessed across the economy and sector are creating real challenges for this frontline primary care service.

Ongoing staff retention and recruitment issues have been exacerbated by the continued delivery of funding under the Additional Roles Reimbursement Scheme (ARRS), which has accelerated the number of pharmacists and qualified technicians leaving community pharmacy for roles in Primary Care Networks and GP surgeries. The lack of pharmacists available to fill permanent positions in community pharmacy has led to locum costs increasing to unsustainable levels in the current funding environment, in turn leading to an increase in temporary pharmacy closures.

The Funding Landscape

Christie Finance witnessed a strong funding appetite in the pharmacy sector, with lenders supporting both first-time buyers and those wishing to expand. However, as the year progressed, the withdrawal of Wesleyan Bank and, to a lesser extent, Recognise Bank, from the sector put pressure on the remaining lenders. This, together with rising interest rates and increasing locum costs, caused lenders to adopt a more cautious approach with their policies. Moving into 2023, the uncertainty of the financial and political markets will no doubt see lenders scrutinise applications in even more detail than they perhaps did previously.

Sentiment Survey

The business property adviser anonymously surveyed pharmacy professionals from across the country to gather their views on the year ahead. When questioned about their sentiment for 2023, 18 per cent said they felt positive, 23 per cent were neutral, and 59 per cent reported feeling negative.

When asked about their sale and acquisition plans, over a third (35 per cent) said they’re looking to buy a pharmacy business this year, 27 per cent said they are looking to sell, 12 per cent are planning to both buy and sell, and 26 per cent don’t have any plans to acquire or sell.

Market Predictions

In the year ahead, Christie & Co expects:

  • A continuation of corporate divestments giving more choice to buyers
  • Increased cost of borrowing
  • The challenges seen in recruiting and retaining staff will continue throughout 2023
  • Reductions in profitability as staff shortages, energy, supply, and the cost of borrowing impact operators
  • Buyers will be more selective in what they purchase and more defensive in their strategy
  • Continued demand for quality businesses across the independent sector

Tony Evans, Head of Pharmacy at Christie & Co, comments, “Whilst, from a market perspective, performance last year was encouraging, there is no doubt that those operating in the sector have seen increasing cost and operational challenges exert huge pressures on their day-to-day trading. As we enter 2023, many of these challenges remain and, therefore, will continue to influence decisions on selling, refinancing or buying as the year progresses. It is hoped that recent, well-publicised campaigns highlighting the pressures contractors are having to endure will result in recognition of the issues but, more importantly, funding resolutions that will offer much needed respite.”

For the full report, visit:

For further information on this press release, contact:
Phoebe Burrows, Corporate Communications Manager
P: 07540 063 598 or E:

Related Articles

View other related news and insights