Lloyds Pharmacy warns of further store closures amid rent row

Lloyds Pharmacy is calling on some of its largest landlords to engage in discussions about “unsustainable rents,” as it warns of the risk of further store closures in the months to come. 

The pharmacy chain, which also sells a wide range of beauty and skincare products, has already had to close 99 community pharmacies in the last 12 months, “as a result of mounting cost pressures and declining footfall,” it said.

Landlords were “failing to acknowledge the harsh reality living with this pandemic” was having on community pharmacies,” Chris Keen, chief financial officer of Lloyds Pharmacy’s parent-company McKesson said.

“As we deal with the second wave of Covid-19, some of our landlords continue to refuse to engage in discussions about unsustainable rents.

“Many health centre landlords base their rents on the number of patients on their register, but these patients are currently being encouraged not to visit sites as GPs provide video and telephone consultations.

“Some institutional landlords have engaged to discuss alternative solutions but the majority, including NHS Property Services, are refusing to recognise the impact of reduced footfall.

“This is clearly unsustainable and puts at risk our ability to continue providing vital healthcare services to the communities we serve,” Keen added.

Lloyds Pharmacy said it had invested significantly in Covid-19 prevention measures to keep its pharmacy teams and patients safe over the last six months of the pandemic, but keeping the doors open had come at a cost.

“Many pharmacies are no longer financially viable, with nearly a quarter of our English Lloyds Pharmacy sites being loss-making after incurring significant Covid-19 related costs,” Keen added.

“Community pharmacy has proven its value on the frontline of the NHS, supporting patients in their communities. Institutional landlords should not be insisting on unsustainable and indefensible high rents, which will only impact on our ability to provide patients with essential access to healthcare.

“We need our larger landlords to acknowledge this and provide more tangible support during these turbulent times. I’d hope their interest – just like ours – is in a sustainable and long-term business.”

Responding to the comments an NHS Property Services spokesperson said: “As an organisation owned by the Department for Health and Social Care, it is vital that NHS Property Services (NHSPS) obtain best value for patients and the public. All monies generated are invested directly back into the NHS estate for the benefit of patients.

"We recognise the challenging trading environment which small businesses and larger organisations, such as McKesson, operate in. As such, in early November we wrote back to the CEO of McKesson UK to offer a variety of practical and tangible solutions, including a bespoke site-by-site approach to ensure that communities retain these vital services. We have not received a response to our proposals.”

The call from Lloyds follows the launch of a flash inquiry into the financial and operational impacts of the Covid-19 pandemic on vital pharmacy services by the All-Party Parliamentary Group on Pharmacy.

Launched on 17 November and running until 30 November the inquiry will lead to a report on what support and reforms are needed for the sector to remain sustainable in the future.