Growth in the independent pharmacy market continues despite ongoing challenges, says Christie & Co report

MARKET COMPOSITION

Christie & Co’s report highlights that, as of March 2025, there are 13,732 pharmacies across the UK, which is a 0.6 per cent decrease as 90 have been removed from the registers since March 2024 (GPhC data). All four country regions saw a decline in numbers, which isn’t surprising given the high number of closures announced in 2023 from the likes of Lloyds.

Unsurprisingly, the volume of 100-hour contracts fell to 784, a drop of 6.6 per cent compared with the previous year. A recent FOI request shows that the majority of operators of these pharmacies have taken advantage of this as a way of reducing their cost base, with 35 per cent of 100-hour pharmacies now trading the minimum permitted 72 hours a week, whilst a further 40 per cent reduced their hours to between 73 and 80 hours. Meanwhile, just 9.6 per cent continue to trade the full 100 hours a week.

Following its divestment and closure programme, which ran throughout 2023 and 2024, Boots saw a decrease in its estate of 5.4 per cent in the year, with the overall numbers having reduced from 2,173 in 2022 to the current level of 1,741 - a 19.9 per cent reduction in its network over the four years. The majority of these disposals have been acquired by the independent sector, increasing independent operators by 6 per cent.  

OPERATIONAL REVIEW

Christie & Co’s analysis of its transactional and valuation data for the last 12 months highlights changes in gross profit margins, wages, locum margin, and EBITDA margins.

Between 2024 and 2025, the average combined gross margins increased by 0.9 per cent, to 32.8 per cent, which is more than offset by the costs associated with running the pharmacy. For example, from 6 April 2025, owners saw a rise in their National Insurance contributions, from 13.8 per cent to 15 per cent on employee earnings above the secondary threshold, decreasing from £9,100 to £5,000 per year. The Employment Allowance has also increased, from £5,000 to £10,500, and the £100,000 eligibility cap has been removed.

Locum rates have decreased by an average of 5.5 per cent throughout the UK. However, there has been a 2.6 per cent increase in locum costs as a percentage of wages. Last year, overall wage costs held firm at 16 per cent; however, this will continue to be negatively impacted by the National Insurance contribution increases. With the ongoing cost pressures experienced by pharmacy operators, it was no real surprise that EBITDA margins fell again, showing a decline of -0.9 per cent, to 9.2 per cent.

SUPPLY & DEMAND

27 per cent of the Christie & Co deals in the first half of 2025 were to first-time buyers, 18 per cent to independent operators (one pharmacy), 25 per cent to small groups (two to 10 pharmacies), 26 per cent to regional multiples (11 to 50 pharmacies) and only 4 per cent to large group/corporate operators (more than 50 pharmacies). This shows that smaller and first-time operators are taking advantage of the many opportunities that exist in the marketplace, which is broadly similar to what Christie & Co saw in 2024.

During 2024 and in the first half of 2025, 76 per cent of Christie & Co pharmacy sales were asset sales, and the remaining 24 per cent were sold on a share sale basis. While the percentage of sales by way of asset has reduced, it is still higher than Christie & Co has witnessed historically and continues to be due to the larger number of corporate sale divestments in the market.

In the first half of 2025, the average timeline from a sale being first agreed to completion was 36 weeks, slightly longer than in the previous year. Asset sales dominated sales structures, with the average completion time lengthening to 41 weeks. Whilst share sales have been fewer in number this year, they have, on average, transacted in just 31 weeks, an improvement on the 33 weeks reported in 2024.

The increased supply of pharmacies on the market has continued, allowing some buyers to secure the purchase at a slightly lower price, resulting in an average of 90 per cent of asking prices being achieved in the first half of 2025, compared with 94 per cent in 2024.

EMPLOYMENT CHALLENGES

As of June 2025, there are 65,743 registered Pharmacists in the UK (GPhC data), which represents a 2.2 per cent increase from the previous year. This growth reflects ongoing efforts to expand the pharmacy workforce, particularly in response to new service demands like the Pharmacy First scheme and the increasing uptake of independent prescribing roles. However, staffing costs continue to be a key challenge within the UK pharmacy. The median full-time salary for Pharmacists rose by 12.3 per cent in 2024 to £50,853. Exact ONS figures for 2025 aren’t yet published; however, wage growth appears to have stabilised in 2025, suggesting a plateau after the significant 2024 adjustment. There are also regional disparities within the ongoing challenges in recruiting and retaining Pharmacists in rural and coastal regions, where access to healthcare is more limited and workloads can be higher.

Data pulled by Locate a Locum, which analysed data of over 200,000 locum pharmacy shifts for the period June 2024 to July 2025, found that average locum rates decreased across England, Scotland and Wales, with the biggest decline in rates in England, at 11.9 per cent. Meanwhile, rates rose by an average of 5 per cent in Northern Ireland, with Lisburn seeing the steepest rise, of 14.4 per cent year-on-year. By city, the lowest recorded hourly rates were seen in London at an average of £25.38 per hour (6.6 per cent decrease), whilst the highest were in Inverness, at an average rate of £44.29 (6.7 per cent decrease). This is the second year that Inverness has sat at the top of the table, reflecting its locational remoteness. With a combined UK average of £32.67 (5.5 per cent reduction), it is hoped that this will provide some respite to the employment challenges the sector has seen.

KEY DISPENSING & SERVICES ACTIVITY

According to the latest data from the NHS Business Services Authority, for the 12 months ending March 2025, overall dispensing activity increased by 8.8 per cent compared with the previous year.

Services activity has become increasingly more relevant to a pharmacy’s overall activity, none more topical than the rollout of the Pharmacy First scheme in England, which, since it launched on 31 January 2024, has marked a significant shift in primary care delivery in England. The service has expanded rapidly and is now available in nearly 10,000 pharmacies across England.

According to NHS Business Services Authority (NHSBSA) data, 4,941,308 consultations were delivered between February 2024 and January 2025. Of these, more than half (2,735,577) were referrals from GP surgeries or NHS 111, categorised as minor illness or urgent medicine supply.

A report published by the Company Chemists’ Association (CCA) in June 2025 highlights that service uptake varies significantly across regions. For example, pharmacies in the Black Country delivered over 2.5 times more consultations per capita than those in North Central London. Over 27 per cent of consultations were delivered in the 20 per cent most deprived communities, demonstrating the scheme’s potential to reduce health disparities.

SENTIMENT IN THE SECTOR

In July 2025, Christie & Co reached out to over 7,000 pharmacy professionals from across the UK to get their views on a range of topics.

Key findings include:

• 48 per cent of respondents reported a negative outlook, while 52 per cent expressed either positive or neutral sentiment
• 75 per cent of respondents observed an increase in patient demand for NHS items over the past 12 months
• A significant 81 per cent reported an increase in demand for private services within the pharmacy setting
• 41 per cent reported that the Pharmacy First scheme has had a positive impact, 34 per cent a negative impact, and 25 per cent remained neutral
• 14 per cent said that they think that the pharmacy funding announced on 31 March 2025 will ease the pressure felt in the sector, 78 per cent said no, and 8 per cent were unsure
• 65 per cent indicated that recruitment for pharmacy staff has become more challenging over the past 12 months
• 39 per cent reported no change in locum usage, 35 per cent noted a decrease, and 26 per cent noted an increase
• The top anticipated growth areas in the next 12 months are other private services, weight loss medication, and Pharmacy First
• 80 per cent agreed that having a pharmacy website is important. However, of those who have a website, 45 per cent only use it for signposting and are therefore potentially missing opportunities to increase income through either sales or services
• 81 per cent of respondents plan to either buy a pharmacy, sell a pharmacy or both in the coming three years
• The most likely areas for investment are automation and adding consultation rooms to offer additional services
• When asked about barriers to investment, 65 per cent cited market uncertainty as the main factor

Jonathan Board, Head of Pharmacy at Christie & Co, comments, “The past year has been one of continued change for the UK pharmacy sector. Against the backdrop of the Department of Health and Social Care, NHS England, and Community Pharmacy England jointly announcing funding arrangements for the Community Pharmacy Contractual Framework for 2024/25 and 2025/26, we’ve seen a further contraction in the number of pharmacy sites across the UK, driven largely by corporate divestments and economic pressures. However, the sector has shown remarkable resilience, with many independent and smaller regional operators stepping up to take on these opportunities.

“Looking ahead, I believe the coming year will continue to be defined by a range of opportunities within the marketplace. With growing recognition from policymakers of pharmacy’s central role in community care, and the increasing adoption of new and additional/private services, we are entering a period where innovation and investment will be key when it comes to successful business growth.”

To read the full ‘Pharmacy Market Review 2025’ report, visit: https://www.christie.com/sectors/pharmacy/pharmacy-market-review-2025/

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For further information on this press release, contact:
Phoebe Hill, Associate Director – Corporate Communications
P: 07540 063 598 or E: phoebe.hill@christie.com

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