̏ The retail side of our business is so much smaller than our dispensing, so we need to be very efficient to make it work for us. As pharmacists we tend to stick to what we are used to, but this usually ends up in too much stock and cluttered shops. RWA introduced us to retail best practices and backed this up with live connections to our stock and transactions which resulted in a far more profitable retail business which is now a significant part of our overall results.˝ - Peter Rice- Peter Rice McKenzies
Northern Ireland is an NHS region where over 80% of the transactions that go through many pharmacies is dispensing. So, to drive sales on the retail side of the pharmacy, you need to ensure you have the right mix of product at the right price. McKenzie’s recognised the need to make sure that they maximised that final 10%. With the opening of multiple Pound Stores, it became unnecessary and unsustainable to be stocking lower value items household items and toiletries.
After the recession hit, McKenzie’s found their retail sales had hit rock bottom. They needed a way to boost overall sales. Front of Counter accounted for 3-4% of their business, so many would not spend a lot of time on it but enhancing sales and margin in 3-4% of your turnover is worth doing.
McKenzie’s had too much data; report generation was slow, the data was out of date, and they could not see what was important. They had 10,000 live product lines across 5 sites with less than 20% of these giving return on investment.
Real World Analytics (RWA) simplified their reporting so that they could see what was selling and what wasn’t, in minutes. RWA’s reporting tool allowed them to see what lines were making 80% of their profit which led them to review their stock listing. McKenzie’s lost time on inefficient purchasing with poor stock control and their price points were not right for the items that sold.
They solved the problem by doing a section by section review based on sales and profit. They started by reviewing well-known brands and medicines were selected on clinical need and a
known brand and the generic alternative was listed. Staff are now restricted to buying from a range of the top 800 lines and cannot purchase outside the range. With advice from Customer Success and RWA’s reporting they improved their space grading and classification of their branches.
Real World Analytics gave McKenzie’s the information they needed to improve their sales. They experienced 5% of steady growth on year on year sales. They have no stock in storage, it is all in their branches. Their margin has jumped to 30% profit in their front of counter, with less stock. McKenzie’s went on to win awards for their “Business Initiative” and “Innovation and Change in Pharmacy”. Monday morning meetings now operate efficiently with ownership of tasks assigned.
McKenzie’s Pharmacy was first established in 1988 with the acquisition of McKenzie’s Pharmacy in Ardoyne. It has grown through acquisition and now consists of Rockville Pharmacy, Ardoyne Pharmacy, Glenavy Pharmacy and
North Queen St Pharmacy. It is an independent pharmacy group providing a personal service to the local community and surrounding areas.
RWA’s reports helped McKenzie’s to better manage their branches. McKenzie’s can better organise their replenishment and buying strategies based on sales and profit margins. Margin by metre reports allow McKenzie’s to measure sales against metres used. This ensures they have the right stock in the right place at the right time.
Areas where RWA’s solution has aided significant returns include:
- Stock Control
- Space Grading
- Identifying where 80% profit comes from, top sellers and slow sellers
- Buying and Replenishment