SPAR opened its first Pharmacy at SPAR store in June 2010 at Shelley Beach on KwaZulu-Natal’s South Coast. It was a tentative step into a new offering aimed at providing consumers with an end-to-end home shopping range. Over the past few years this store format was challenged by new regulations and developing an understanding of the offering and distribution complexities, while dealing with increased competition and low margins.
2017 was the year in which Pharmacy at SPAR came into its own. We opened 28 new stores and concluded the acquisition of the pharmaceutical wholesaler, the S Buys Group. The purchase of the S Buys Group became effective as of 1 October 2017. Acquisitions further included 15 independent pharmacies which form part of the Klinicare group in the Eastern Cape. By the end of 2018 there will be more than 100 stores of which only about 15% are owned by retailers – the rest are owned by pharmacists.
Pharmacy retailing is very different to food retailing. Our initial approach – that a pharmacy should be in or adjacent to a SPAR store, similar to the TOPS at SPAR model – has changed when recognising that pharmacies rely on main street visibility while ideally retaining close proximity to a SPAR store.
SPAR’s biggest contribution to the success of an independent pharmacist is in retail: we offer, for example front-of-shop systems, design and category management skills, reward systems and loyalty programmes that consumers expect, but which are often lacking in independent pharmacies.
Within the regions, Pharmacy at SPAR has dedicated and specialist pharmacy and marketing retail support. Pharmacy at SPAR forms part of the guild structure, and is further governed by the Department of Health and the South African Pharmacy Council (SAPC).
In terms of their offering, all pharmacies have a dispensary, a clinic and a general personal care section. The clinics in particular play an important role in the success of a pharmacy and will be a key focus area in future affordable healthcare development.
Pharmacies are restricted in their procurement options, with about 40% of drugs being imported. As the SPAR distribution centres are currently not licenced to sell scheduled medicines, pharmacies source from a range of wholesalers.
Pharmacy at SPAR stores are designated service providers to the majority of medical aids, which means that we can diagnose, treat or care for their members and claim through an administrator.
One area in which Pharmacy at SPAR is making a meaningful contribution to the group is in attracting empowerment groups, which we can in turn support through skills development and training programmes.
Pharmacy at SPAR is a unique offering that is not yet available under the SPAR licence in any other country. Our long-term goal is to refine the offering in South Africa before expanding into other countries, such as Ireland, where there are similar opportunities to what we are exploring and developing in our home market.