Dear valued customer,
We would like to give you an understanding of why we have applied to merge the two pharmacies in Swinton.
Firstly, the proposed merger is currently at the application stage which will be considered by NHS England who will determine if the two branches can merge.
The decision to consider merger and make this application was made because of funding cuts that have been imposed on community pharmacies by the NHS. Due to these cuts, if we do not find ways to reduce our operating costs our whole company could go out of business, this despite having been a local, family-owned business for almost 100 years.
In October 2016, the government imposed a 12% funding reduction on community pharmacy, this has been followed by a further funding reduction of 7.5% in 2017, and subsequent flat funding since that point. The result of this funding squeeze and a refusal renegotiate funding taking into account recent inflationary cost changes have put community pharmacies across the country under increasing financial pressures. A normal business would simply increase prices to their customers to cover rising costs, Community pharmacy however receives 90% of its income from the NHS and cannot raise costs to them as what they will pay us, for supply of drugs and services, is imposed on us.
This has resulted in a 40% real terms funding reduction, whilst salary costs have risen 50%, energy costs have soared, and inflation is increasing.
We are also having to manage a nationwide shortage of pharmacists resulting from GP practices targeting pharmacists working in community pharmacy and paying them above the market rate to work in the GP practice. This has in turn raised both pharmacist and locum pharmacist salaries which has added additional pressure, resulting in temporary and permanent pharmacy closures across England. https://www.express.co.uk/news/uk/1695660/nhs-healthcare-staff-shortage-patient-funding-vn
Our pharmacy within the surgery on Crown Street is also having to deal with the additional pressure of soaring rents, with our rent in Crown Street Surgery increasing significantly in the last 4 years.
The income reductions described and the lack of proper funding by the NHS are impacting pharmacies across the country, with experts warning that 3000 pharmacies could close by the end of 2024. This is not a situation that only affect Weldricks locally. Large multi-national companies such as Boots and Lloyds are closing loss making English pharmacies. Lloyds pharmacy has closed or sold approximately 800 pharmacies nationwide since the funding cuts were announced, whilst Boots have closed or sold over 60 pharmacies in the same period. Nationally during the financial year 2021/2022 418 community pharmacies closed permanently.
We have, of course, resisted closing any of our pharmacies, taking alternative steps to reduce our costs but we have now run out of ways in which we can reduce costs and so we are now faced with the decisions, such as merging pharmacies to protect these vital services in the community.
The National Pharmaceutical Association (NPA) and the accountants EY have researched and delivered to the Government a study which found that pharmacies in England are now under-funded to the tune of £497m, and that three-quarters of family-owned pharmacies in England could be forced to shut their doors over the next year, if the current contractual arrangements carry on unchanged. The report estimates that the average pharmacy will be making an annual loss of £43k by 2024.
Should we continue to find no alternative to merging the two pharmacies in Swinton, our existing pharmacy on Church St will be modernised in preparation for the merger. Additional consulting rooms will enable to us to expand our range of services, improving the communities access to high quality local healthcare services. Subject to planning, a 24/7 locker collection point will also be installed, enabling patients to collect their prescription out of hours.
Weldricks is a locally based, local family-owned business, employing over 600 local people. It started in the 1930’s when my great grandmother opened her first pharmacy in Doncaster City Centre and has grown continually in the following years to over 60 pharmacies in South Yorkshire and North Lincolnshire with the business remaining 100% family owned. Having spent nearly 100 years growing this family business to the size it is now, it is with deep regret that we are having to consider this action in Swinton. At the same time, we accept no one has a right to exist, that the NHS has a certain amount of tax payers money to spend and we have to survive within that budget as a key supplier of professional services to the NHS.
I do hope the above gives you a sufficient insight to understand the current situation facing community pharmacies in England and why we see no other choice than to consider merging the pharmacy and transfer our customers to the updated nearby Weldricks on Church Street.