Prescription margins eroding, four of twelve sites loss-making

The group was earning progressively less on prescription medicines while online retail took share in the over-the-counter range. Four of the twelve sites were loss-making, two of them in locations with expiring leases. The group result stood at EUR 0.3m — 0.7 % of revenue.

We built a separate contribution margin model for each site, covering rent, staffing structure and footfall by time of day. On that basis the range was shifted: less floor space for low-margin prescription stock, more for OTC, cosmetics and fee-earning services such as vaccinations and medication reviews. Two sites were transferred to a regional competitor.

The group now runs ten sites. Gross profit per site rose 11 % and the group result went from EUR 0.3m to EUR 1.4m — on revenue reduced to roughly EUR 35m, a margin of 4.0 %. The transfer of the two sites realised EUR 1.4m.