Some pharmacies face closure if urgent financial support is not given. Photo / 123RF
Some pharmacies face closure if urgent financial support is not given. Photo / 123RF
The Pharmacy Guild of New Zealand says hundreds of pharmacies could be forced to close their doors if they do not receive urgent financial support from the Government.
Disruption from the Covid-19 pandemic has hit many independent operators, particularly community pharmacies, as prescription dispensing and retail sales continue to plummetas a result of the lockdown.
As retail sales fall, costs were increasing as pharmacies implement additional safety measures in stores and home delivery functions to operate in a Covid-19 environment.
Andrew Gaudin, chief executive of the Pharmacy Guild of New Zealand, told the Herald pharmacies' revenues were down about 75 per cent over the past two weeks.
"Our pharmacists and their teams are delivering an essential service in very testing circumstances due to Covid-19 but the simple fact is their businesses are facing increasing costs and falling sales," Gaudin said.
"Many of our member pharmacies are doing it very tough despite being a vital part of the Covid-19 response as well as the wider primary health care sector."
Gaudin said the organisation's member pharmacies relied on retail sales to make their businesses work financially. But dropping sales meant without adequate support outside of the wage subsidy scheme would many stores would be forced to close.
"At this stage people are hanging in there and making it work, but we're most concerned that we're only half way through the lockdown."
The sector received $15 million from the Government pre-lockdown. More funding was needed to meet ongoing financial needs, Gaudin said.
"We're almost two weeks in, the bills are mounting ... we don't want to see people being unable to pay the bills and/or bankruptcy getting in the way of keeping pharmacies open in this critical time."
A handful of pharmacies had already closed and others placed into voluntary administration, he said.
The Pharmacy Guild of New Zealand has more than 600 members. There are more than 1050 pharmacies operating throughout the country.
Gaudin estimates that more than 200 pharmacies qualify for the wage subsidy, but the scheme was "just a drop in the bucket" of total costs.
"The Government needs to step in and help these essential businesses through extremely difficult times so they can keep delivering the service their communities need.
"If this doesn't happen, some of our member pharmacies will be forced to close – just when they are needed more than ever."
The Herald has contacted Green Cross Health, which operates more than 350 Unichem and Life Pharmacy stores, for comment.
Retail NZ chief executive Greg Harford said pharmacies were lucky that they were at least able to remain open and trade their stores during the level 4 lockdown.
The struggles pharmacies were facing were far worse for some retailers who could not trade, Harford said.
"Pharmacies have a slight advantage in that they are allowed to be open under the lockdown provisions, but my understanding is that many of them are either operating on reduced hours or are closed," Harford said.
"Right across the board, and pharmacies are no exception, we are seeing that consumers are not getting out and spending in the way they normally would and pharmacies will need support like other businesses to get through this."
It is believed that the wage subsidy scheme on its own is not enough to get struggling businesses through these challenged times.
"The wage subsidy is a good thing, and a good start, but the reality is it is not going to be enough to save many businesses from the downturn that will hit us shortly."
Harford said businesses had been offered much greater financial support across the Tasman in Australia. This included rent relief and greater efforts to keep people employed in the long-term.
This, and additional financial support aside from the wage subsidy, from the Government would be welcomed across the sector right now, he said.
"Retailers are desperately crying out for some form of Government support rent relief package; rent is a massive fixed cost for retailers, it is not something they can necessarily negotiate down, though some are doing their best to do that."
Liberalisation around the rules of e-commerce and allowing more businesses to trade online during the lockdown would also help retailers in the current environment, he said.
