The extensive spread of in-store pharmacies is soon to be followed by supermarket doctors' surgeries, as the big four try to diversify their offer to serve the needs of the local community. Rachel Barnes reports
It has been 12 months since supermarket shoppers have been able to pick up their prescriptions with their weekly shop, following the relaxation to pharmacy licensing rules in April last year. Most of the multiples are now expanding the number of outlets in their stores. Sainsbury has topped 200 pharmacies already and plans to add 50 more. Asda hopes to open a further 30 by December, taking its tally to 120, and wants eventually to have one in every store. Tesco, meanwhile, is forging ahead with more than 200 pharmacies across its stores.
The pharmacy frenzy is the latest evidence that the multiples' strategies are evolving from a crude price war with the high-street to grab the consumer pound into a more subtle gambit to become the hub of the local community - by winning consumer hearts and minds.
Aside from pharmacies, the supermarkets are now offering a whole raft of community services. Creches and polling booths are both popping up in supermarkets, and GP surgeries are due to open in stores in the near future. The big four have already said they are looking closely at the government's intentions in regards to community health. Meanwhile, in-store cafés and restaurants have been the heart of many communities for some time, providing meeting places and somewhere inexpensive to eat for mothers and pensioners.
The shift in emphasis is a sign of things to come, says Nick Gladding, senior analyst at Verdict Research. "Complementary community services, such as pharmacies that fit with the health and beauty offer, are emerging as a key battleground for the big supermarkets. It's clearly a new revenue stream the supermarkets are exploring. It's a way to broaden their appeal even more to customers, provide extra services and differentiate themselves from competitors."
Ironically, given the OFT's decision to refer the supermarket sector for investigation, it was the government rather than the multiples that laid the foundations for the change of tack in public health policy.
In January, it set out its agenda outlining plans to shift the focus of health services towards local communities. David Colin-Thome, the Department of Health's champion of primary care, says that the likes of Tesco are ideally placed to offer GPs in their stores. "We need to extend access to primary care services," says DoH spokesman Matthew Ward. "And the use of the private sector, including supermarkets and chemists, is one of the ways this could be done."
Even the National Pharmaceutical Association sees the benefits offered by the new entrants. An NPA spokeswoman says: "Supermarkets may see commercial advantage in opening a pharmacy in their store because, historically, there have been reports of a halo effect generating greater health and beauty sales than in supermarkets without one."
The first GP surgery is expected to open at a Sainsbury store in Epsom, Surrey. Chief executive, Justin King, has already met with public health minister Caroline Flint to discuss the proposals. According to a Sainsbury spokeswoman, it would be a natural link to have GPs in store alongside pharmacies, depending on available space.
Asda, too, believes that GPs could sit comfortably alongside its pharmacy business. "It's very much at the concept stage," says Faisal Tuddy, commercial manager for Asda Health. "But we're looking at it closely as it provides customers with something they want in a convenient way. It would further strengthen consumer trust, creating a total Asda health brand."
Even offering mini operations, such as laser eye surgery could be in supermarket gameplans in the future, although nothing is currently planned, says Tuddy.
As well as leading the way with pharmacies, many of Tesco's planning applications are approved on the condition of developing additional facilities in the locale, such as the £2.5m community centre it must build alongside a new store in Oldham and the application for a 6,800 sq ft community and dental health centre in Devon.
In addition, Asda, Tesco and Sainsbury have expressed interest in forging closer ties with the police, building on the moves of several co-operative societies towards in-store cop shops. The latest such example opened in Yapton, West Sussex earlier this month. The room above the Southern Co-operatives store, converted into a community resource, is manned by police, parish councillors and the Citizen's Advice Bureaux. And more are in the offing, following the Metropolitan Police's ambition to set up 150 outlets in non-police premises, such as grocery stores, by April 2007.
Asda already has police, doctors and nurses visiting stores to talk to shoppers, and it sends out its own pharmacists to talk to schools on subjects such as nit awareness.
However, despite Asda's aim to be a store of the community, it is conscious of devoting too much space to its non-core offer. Waitrose has not gone down this route for the same reason, says a Waitrose spokeswoman. "Our priority is offering the highest quality food to our customers, and food therefore has to be the main focus in our branches," she says.
There is always a caveat, agrees Gladding. Pharmacies are a perfect fit for supermarkets as they encourage extra sales within their existing health and beauty offers, he says. "But whether they can make more money out of these other sorts of services rather than core uses is unclear. These extra services can only really pay off in bigger stores. But they are great things for supermarkets to try out and you can easily argue that these are exactly the services that people want - you pick up your prescription and then your shopping - so why shouldn't they offer them?"
There's little doubt that the march of the supermarkets into community services will be a cause for concern for some, adds Gladding. "However, it could also go the other way. This could also be a route for supermarkets to improve their positioning and move from being the all-powerful retailer to an organisation that serves the community on all fronts."
Suki Thompson, managing director of marketing consultancy The Haystack Group, says: "It's all good news for the supermarkets of tomorrow.
"The more often that supermarkets give customers a reason to come back then the more money they will spend, so it's win-win."
Going to the supermarket could one day become more of a day trip, like visiting a big shopping centre, such as Bluewater, she adds.
"It's a scary thought, but will we one day see an entire town's shops and services under one supermarket roof? We could be spending six hours in Tesco getting everything done in one hit. That could be the reality of the future supermarket."
It has been 12 months since supermarket shoppers have been able to pick up their prescriptions with their weekly shop, following the relaxation to pharmacy licensing rules in April last year. Most of the multiples are now expanding the number of outlets in their stores. Sainsbury has topped 200 pharmacies already and plans to add 50 more. Asda hopes to open a further 30 by December, taking its tally to 120, and wants eventually to have one in every store. Tesco, meanwhile, is forging ahead with more than 200 pharmacies across its stores.
The pharmacy frenzy is the latest evidence that the multiples' strategies are evolving from a crude price war with the high-street to grab the consumer pound into a more subtle gambit to become the hub of the local community - by winning consumer hearts and minds.
Aside from pharmacies, the supermarkets are now offering a whole raft of community services. Creches and polling booths are both popping up in supermarkets, and GP surgeries are due to open in stores in the near future. The big four have already said they are looking closely at the government's intentions in regards to community health. Meanwhile, in-store cafés and restaurants have been the heart of many communities for some time, providing meeting places and somewhere inexpensive to eat for mothers and pensioners.
The shift in emphasis is a sign of things to come, says Nick Gladding, senior analyst at Verdict Research. "Complementary community services, such as pharmacies that fit with the health and beauty offer, are emerging as a key battleground for the big supermarkets. It's clearly a new revenue stream the supermarkets are exploring. It's a way to broaden their appeal even more to customers, provide extra services and differentiate themselves from competitors."
Ironically, given the OFT's decision to refer the supermarket sector for investigation, it was the government rather than the multiples that laid the foundations for the change of tack in public health policy.
In January, it set out its agenda outlining plans to shift the focus of health services towards local communities. David Colin-Thome, the Department of Health's champion of primary care, says that the likes of Tesco are ideally placed to offer GPs in their stores. "We need to extend access to primary care services," says DoH spokesman Matthew Ward. "And the use of the private sector, including supermarkets and chemists, is one of the ways this could be done."
Even the National Pharmaceutical Association sees the benefits offered by the new entrants. An NPA spokeswoman says: "Supermarkets may see commercial advantage in opening a pharmacy in their store because, historically, there have been reports of a halo effect generating greater health and beauty sales than in supermarkets without one."
The first GP surgery is expected to open at a Sainsbury store in Epsom, Surrey. Chief executive, Justin King, has already met with public health minister Caroline Flint to discuss the proposals. According to a Sainsbury spokeswoman, it would be a natural link to have GPs in store alongside pharmacies, depending on available space.
Asda, too, believes that GPs could sit comfortably alongside its pharmacy business. "It's very much at the concept stage," says Faisal Tuddy, commercial manager for Asda Health. "But we're looking at it closely as it provides customers with something they want in a convenient way. It would further strengthen consumer trust, creating a total Asda health brand."
Even offering mini operations, such as laser eye surgery could be in supermarket gameplans in the future, although nothing is currently planned, says Tuddy.
As well as leading the way with pharmacies, many of Tesco's planning applications are approved on the condition of developing additional facilities in the locale, such as the £2.5m community centre it must build alongside a new store in Oldham and the application for a 6,800 sq ft community and dental health centre in Devon.
In addition, Asda, Tesco and Sainsbury have expressed interest in forging closer ties with the police, building on the moves of several co-operative societies towards in-store cop shops. The latest such example opened in Yapton, West Sussex earlier this month. The room above the Southern Co-operatives store, converted into a community resource, is manned by police, parish councillors and the Citizen's Advice Bureaux. And more are in the offing, following the Metropolitan Police's ambition to set up 150 outlets in non-police premises, such as grocery stores, by April 2007.
Asda already has police, doctors and nurses visiting stores to talk to shoppers, and it sends out its own pharmacists to talk to schools on subjects such as nit awareness.
However, despite Asda's aim to be a store of the community, it is conscious of devoting too much space to its non-core offer. Waitrose has not gone down this route for the same reason, says a Waitrose spokeswoman. "Our priority is offering the highest quality food to our customers, and food therefore has to be the main focus in our branches," she says.
There is always a caveat, agrees Gladding. Pharmacies are a perfect fit for supermarkets as they encourage extra sales within their existing health and beauty offers, he says. "But whether they can make more money out of these other sorts of services rather than core uses is unclear. These extra services can only really pay off in bigger stores. But they are great things for supermarkets to try out and you can easily argue that these are exactly the services that people want - you pick up your prescription and then your shopping - so why shouldn't they offer them?"
There's little doubt that the march of the supermarkets into community services will be a cause for concern for some, adds Gladding. "However, it could also go the other way. This could also be a route for supermarkets to improve their positioning and move from being the all-powerful retailer to an organisation that serves the community on all fronts."
Suki Thompson, managing director of marketing consultancy The Haystack Group, says: "It's all good news for the supermarkets of tomorrow.
"The more often that supermarkets give customers a reason to come back then the more money they will spend, so it's win-win."
Going to the supermarket could one day become more of a day trip, like visiting a big shopping centre, such as Bluewater, she adds.
"It's a scary thought, but will we one day see an entire town's shops and services under one supermarket roof? We could be spending six hours in Tesco getting everything done in one hit. That could be the reality of the future supermarket."
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