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'We valued 84 pharmacies last year . . . we bought 20'


Goretti Brady, managing director of LloydsPharmacy Irish arm.

Goretti Brady, managing director of LloydsPharmacy Irish arm.

Naoise Culhane

Goretti Brady, managing director of LloydsPharmacy Irish arm.

I'm a perfectionist," admits Goretti Brady, in a tiny backroom of a pharmacy in the south Dublin suburb of Blackrock.

Pity about the instant coffee, then, but we can let that one slide.

The managing director of the Irish arm of LloydsPharmacy, the pan-European chain owned by German giant Celesio, Brady is buzzing. Maybe she got her early morning caffeine shot somewhere else.

"People know me and understand me. I make no apologies for it. If you're going to do something, do it right," she says. "I get annoyed if something sub-standard comes in to me. I get really annoyed if I ever have to be in a store and see something that shouldn't be there. Business is business. There are 91 stores and sometimes it can happen, but it won't happen again."

Brady - a qualified pharmacist who worked her way up through the ranks - is going to need to keep those eyes in the back of her head propped up with matchsticks soon.

She's planning a significant expansion of the chain in Ireland, expecting to add up to 60 outlets to the estate in the next three years. That will be largely through acquisitions, with just a few greenfield openings thrown in for good measure.

The growth is partly a symptom of the demise of the independently-owned pharmacy. The harsh reality is that most are struggling. For many, salvation lies in selling up.

Cuts imposed by the Government have hit big chains badly, even with their synergies and scale, so you only have to imagine what they must be doing to standalone pharmacies. You'd expect the owners of independent pharmacies might be in danger of trampling each other to death in their rush to offer up their stores for sale.

"About two years ago we put a strategy in place to increase our scale," says the Roscommon native who now lives in Tipperary (Brady, 48, took over the top job in 2013, having been previously head of marketing and operations at the chain, which was then known as DocMorris and before that, mostly as Unicare).

"We looked at what we wanted for a LloydsPharmacy; we want a community focus, a customer-centric approach, quality teams and a sustainable business model.

"What we found was that once we went out to the market to acquire, people came to us. We've only approached one owner. We've gone into it with a robust model. We know exactly what we want and exactly what we don't want. We valued 84 pharmacies last year. We bought almost 20."

A snapshot of some of the accounts for businesses LloydsPharmacy has acquired shows a mixed bag of financial performances, some posting losses, others small profits, before they joined the group

"If it's not sustainable, we're not interested. Some vendors still have very unrealistic expectations. I genuinely don't understand that. We've worked out the model for the next five to 10 years and we believe that we offer a fair price," Brady says, adding that some pharmacies now typically sell for about half the price they might have at the tail end of the boom.

"There's a huge amount of very challenged pharmacies out there. Many of the pharmacies we've looked at are loss-making, or are going to be loss-making very soon."

Independent research backs up the bleak picture.

A report last year by accountancy and business advisory group Fitzgerald Power showed that since 2009, austerity budgets that included a series of cuts in Government payments to pharmacies have resulted in the average pharmacy turnover being cut by about 23pc. It predicted increased consolidation in Ireland, but also noted that there's much more competition.

The sector was deregulated in 2003, and the growth in chains meant that by the end of 2013 there were more than 1,700 pharmacies in Ireland - 32pc more than in 2003.

To help counter the challenges that are faced by the sector, the report said that pharmacies need to position themselves as the frontline point of care in the community.

That fits neatly into plans now being investigated by Health Minister Leo Varadkar for the Minor Ailment Scheme. He told the Irish Pharmacy Union conference in April that he would like to see pharmacists being able to prescribe medicine, mirroring what pharmacists in other countries do.

It also squares with Brady's own ambitions for LloydsPharmcy in Ireland, to see its outlets increasingly entrench their positions in the community.

"We see pharmacy of the future having a holistic approach to primary care, at a community level, so we're setting ourselves up for that," she says, pointing to increased local initiatives promoted by the chain in areas such as weight loss and smoking cessation.

"It benefits the whole healthcare system in general," she says.

But despite all the changes Brady has helped initiate, including stripping out the clutter of peripheral sales lines from jewellery to bubble bath, LloydsPharmacy has its own challenges originating from those government initiatives and a reluctance by consumers to loosen the purse strings.

Celesio's recently published annual report shows that turnover at the chain in Ireland edged just slightly higher to €125.2m last year from €123.7m in 2013, with only a "slight improvement" expected this year. Celesio didn't break out profits, but said the Irish chain's earnings before interest and tax "did not meet expectations" as austerity measures hit the business.

By comparison, rival Boots generated sales of €298.3m in Ireland in the 12 months to the end of March 2014 and a €20m operating profit. It had 74 stores at the time, many of them bigger than rival outlets.

Brady insists that LloydsPharmacy in Ireland is going through a "buoyant phase".

"We have a target that we have to hit every year and we've done that every single year despite the challenges," she says. "We're increasing our footfall and we're dragging in new customers all the time. During the downturn we held our nerve and concentrated on the health side of the business."

Celesio has evidently put a lot of faith in the Irish business. The annual report also reveals that the group spent a total of €31.5m on acquisitions of, and investments in, pharmacies last year, particularly as it optimised its portfolio in Norway and Ireland. That compared to €6.4m it spent in 2013.

Brady won't say how much the latest expansion phase is likely to cost, but over the next three years, if LloydsPharmacy broadens its footprint as expected in Ireland, it's surely looking at a spend approaching €50m.

One of the latest acquisitions was a store in Letterkenny, Co Donegal. Brady visited the outlet last week following its rebranding.

"I was driving back and I was so motivated. My career is based around people and how you deal with them and how to develop teams around you and enjoy your work.

"None of this is rocket science. If you're giving the customer what they want, then the rest will happen.

"I've a little Post-it on my computer and it says: is this helping the customer?" If it's not, it's ditched.

Could nearly put one of those on the coffee jar.

Indo Business