First-time buyers acquire one-third of pharmacies in 2024 - reveals Christie and Co annual report

'It’s likely that pharmacy market appetite in England will be tempered by the outcome of the much-needed funding settlement negotiations'

In 2024, first-time buyers remained the most active group in the pharmacy market, accounting for 33 per cent of acquisitions through Christie and Co, though this marks a decline from 45 per cent in 2023.

In comparison, large groups and corporate operators represented only 8 per cent of acquisitions last year, according to the broker's Business Outlook 2025 report.

Over the 12 months ending in November 2024, the broker completed 222 pharmacy sales, more than double the total from the previous year, with corporate disposals making up 36 per cent of these sales.

The broker expects corporate disposals to decline in 2025, with an increasing volume of independent sales replacing them.

Jonathan Board, head of pharmacy at Christie and Co, stated that 2024 was a record year for pharmacy transactions partly driven by “an increased level of corporate divestments.”

Despite a record year for transactional activity, Christie and Co reported a 6.3 per cent decrease in the average price of pharmacy businesses sold in 2024.

The report highlights that, while deal volumes reached an all-time high amid operational challenges and cost pressures, distressed pharmacies on the market generated significant interest from buyers keen to acquire competitively priced opportunities at local and regional levels.

“This negative price movement, therefore, was a product of the high numbers of smaller pharmacies and corporate disposals sold in the first half of the year,” it notes.

However, the broker saw a vast increase in the average value of pharmacies added to their pipeline in the last quarter, with offers made and deals accepted, which is expected to positively impact their price index in 2025.

The report reveals that pharmacy businesses in 2024 achieved an average of 91 per cent of the asking price, a decline from the previous year, when offers were accepted at an average of 2.5 per cent above the asking price.

Pharmacy market in 2025

The broker predicts that cost challenges will continue to be a key factor in the market, particularly with the rise in the National Living Wage (NLW) from April 2025.

It is hoped that an improved funding settlement would alleviate distress within the sector.

The broker expects the trend of increased independent sales seen in Q4 2024 to continue, as corporate disposals decrease.

Additionally, group operators are anticipated to show a stronger interest in acquisitions as some cost pressures begin to stabilise.

Board is optimistic that the outcome of pharmacy's broader funding agreement, which will replace the 5-year Community Pharmacy Contractual Framework from 2019, will provide some certainty for all contractors, allowing them to plan and invest accordingly.

He stated that while cost pressures are likely to persist in the foreseeable future, market appetite remains strong for well-established, well-run businesses as well as the numbers of pharmacies sold over the last 12 months.

“But as highlighted in the Christie and Co Pharmacy Market Review 2024, it’s likely that market appetite in England will be tempered by the outcome of the much-needed funding settlement negotiations,” he added.

As part of its annual sentiment survey, the broker asked pharmacy professionals across the country for their views on the year ahead.

While 22 per cent expressed a positive outlook, the majority (50 per cent) reported feeling negative due to the uncertainty around funding in the sector.

Regarding their sale and acquisition plans, 68 per cent indicated they are considering buying and/or selling this year.