TerryWhite Chemmart talks cost of living, and what’s next

Inside FMCG talked with Nick Munroe, executive GM at TerryWhite Chemmart (TWC) about how the company is being impacted by its customers having to face increased living costs and what lies ahead for the rest of this year. IFMCG: What were some of the highlights of 2022 for TerryWhite Chemmart? Nick Munroe: Last year, the TerryWhite Chemmart (TWC) network focused on improving the health outcomes of all patients and our ambition to support a better future for Australian pharmacy. This was achieved through greater access and extended health services, which now include hearing clinics, palliative care support, medications by injection, asthma screening support, diabetes health checks, vaccinations, sleep services, and UTI prescriptions in QLD and soon to be in NSW. This expanded scope of practice has required training, investment in even more clinic rooms, operational changes at a store level, and CPD for pharmacy teams. The growth of the TWC network to more than 500 pharmacies has created economies of scale in operations and procurement, the benefits of which have been passed on to our network. On the frontline, TerryWhite Chemmart pharmacies have reoriented their businesses to manage the influx of community vaccinations, and they’ve done this in a resilient, determined, and compassionate way. In the last two years, our network has delivered over two million Covid-19 and flu vaccinations. How is the rising cost of living changing the way your customers are shopping? Our national marketing approach communicates the value of health, with an ongoing promise of providing real value every day and three weekly real deal promotions. We have seen a strong uplift during our regular sales events, and our three weekly promotions are showing a significant year-on-year increase in customers looking for great value. The commitment of our pharmacy network has led to continued strong growth, with total sales up 13.9 per cent and like-for-like sales up 11.9 per cent, underpinned by script growth of 6.7 per cent, total, and 4.8 per cent like-for-like. Have you had to update your pricing due to the increased cost of goods? If so, how do you balance price vs value in your offering? At TerryWhite Chemmart, value is more than just a price and quality equation. Consumers are loyal to brands that match their values and service expectations. Our network partners have an unrelenting commitment to improving health in their local communities, and the reward for this is an increasing number of people choosing to shop our pharmacies. Our private-label brands are ranged and promoted to provide great value to customers and improve margin to our pharmacy owners. With ranging to suit the pharmacy footprint, and the industry-leading iHUB ordering system, our pharmacy teams achieved strong gross profit margins through private-label product sales in 2022. Are there any new initiatives or projects that you’re keen to launch this year? This year will bring many opportunities to pharmacy, as pharmacists expand their roles in community health. Our main focus will be to support our network with tools to improve the health outcomes of patients. This will include supporting our pharmacists in expanding their scope of practice, and the launch of our new digital customer platform – MyTWC. The increased scope of practice occurring across the country is a taster for bigger things to come. As a business, we are prepared for this shift, and our pharmacy teams are chomping at the bit. The changes we’ve made to our clinic strategy over the last two years lay a strong foundation for taking advantage of this industry-wide change. MyTWC offers the convenience of a one-stop destination where customers can manage their health online by enabling e-scripts and booking pharmacy services. As we learn more about our customers’ digital behaviours, we will continue to evolve this platform. At TWC, our pharmacists and pharmacy teams will always be central to our proposition. Recruitment has become a major challenge for pharmacies in recent times, and we are supporting our network partners with a suite of services, including recruitment marketing, education and intern programs, a centralised recruitment portal, job ad placements and a dedicated careers team to find top-quality pharmacists and pharmacy teams. We are also partnering with pharmacy schools to promote community pharmacy as a meaningful and rewarding career option, to secure their long-term commitment to the industry.This article was originally published in the 2023 Australian Retail Outlook, powered by KPMG. Download here.