LloydsPharmacy seeks tangible support from institutional landlords

LloydsPharmacy has asked its health centre landlords to recognise the impact of reduced footfall and renegotiate unsustainable rents or risk further closures of unviable pharmacies.

Having already exited 99 community pharmacies in the last 12 months “as a result of mounting cost pressures and declining footfall”, LloydsPharmacy is appealing to some of its largest landlords as they “fail to acknowledge the harsh reality living with this pandemic is having on community pharmacies”.

Citing findings from a recent report commissioned by the National Pharmacy Association which revealed up to 72 per cent of English pharmacies will be in deficit by 2024 under the current funding, the multiple argued that keeping its doors open during the pandemic had come at a cost.

Chris Keen, McKesson UK’s chief financial officer, 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.”

After several failed attempts to engage in rent negotiations with NHS Property Services, LloydsPharmacy says it is now insisting on a 25 per cent discount to the rent in these locations.

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.”

In response, a spokesperson for NHS Property Services told Pharmacy Business: “As an organisation owned by the Department for Health and Social Care, it is vital that NHS Property Services 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 (owner of LloydsPharmacy) 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.”