Purchasing a pharmacy is a massive decision. It is not just a financial commitment – it will shape how you spend your days, who you work with, and what kind of clinical practice you build.
Pharmacies come in various formats, each with specific opportunities, risks and day-to-day operational needs. Different styles will suit different people, depending on their personality, goals and circumstances. Getting clear on which format suits your vision is central to a good buying decision.
Below is a summary of the pros and cons of the four main types of community pharmacies in Australia.
Medical Centre Pharmacies
Located inside or adjoining a medical centre.
Pros:
- Close-knit clinical environment with strong focus on dispensary work.
- Sales normally heavily weighted towards scripts, supported by smaller retail offering.
- Increased interactions with GPs and other health practitioners.
- Generally smaller shops (150m2 or less) and smaller staff teams, meaning lower rent and wages and less active management required from the owner.
- Consistent exposure to script customers if the medical centre is performing well.
Cons:
- Heavy reliance on the performance of the medical centre. If GPs leave, the pharmacy will be directly impacted.
- Normally limited floor space and limited scope to develop retail and services revenue.
- The PBS Approval Number in most of these pharmacies cannot be relocated out of the Centre (refer to ‘Pharmacy Location Rules’), meaning the pharmacy is generally tied to its site.
Strip Pharmacies
Located on a local high street, often near a supermarket, medical centre, or other shops.
Pros:
- Offer the most flexibility to run different pharmacy brands and models depending on the location and floor space available. For example, strip pharmacies can be highly profitable as small, independent service-based businesses, or large-format discount models.
- Can offer high exposure to foot traffic, depending on the strength of the strip and proximity to parking, supermarkets etc.
- Often independent landlords (not large corporate landlords) which makes it easier to secure long lease tenure and reasonable rent.
- Increased chance of the site freehold becoming available for purchase.
- Opportunity for balanced turnover between dispensary, retail and services.
- The PBS Approval Number can normally be relocated more easily.
- There is flexibility in hours of operation. You can usually determine the opening hours that work best for your business and lifestyle.
Cons:
- Strong reliance on the strength of the surrounding shops. Changes to the local strip can impact the pharmacy, for example, a nearby supermarket closing down or moving.
- Customer parking and ease of access is critical.
- Can be more exposed to competition, such as multiple pharmacies on the same strip.
- Less-restrictions around relocating a PBS Approval Number in strip settings means that competitors can potentially move next door or nearby.
Small Shopping Centre Pharmacies
Located inside ‘everyday’ or ‘neighbourhood’ shopping centres which are usually anchored by a supermarket and a handful of other stores.
Pros:
- Strong exposure to local customers doing regular grocery shopping.
- Pharmacy sites tend to have medium or large floor space which can support various brands and models.
- Good balance of sales between retail and dispensary.
- Can offer protection from competition. Often there is only one or two pharmacies in a small centre.
Cons:
- Normally longer opening hours and larger staff teams, so more active management is required from the owner.
- Rents are typically higher than strip pharmacies.
- Highly sought after in the marketplace so can be relatively expensive to buy.
Large Shopping Centre Pharmacies
Located inside shopping centres with 50 or more retailers, like a Westfield or similar.
Pros:
- Exposure to very strong foot traffic, drawing customers from a large geographic area.
- Generally larger sites, favouring models that emphasise retail sales like discount brands.
- Opportunity to generate very high turnover if the owner can capture the foot traffic moving through the centre.
- Sales generally weighted more towards retail than dispensary, but strong script volume still possible.
Cons:
- Reliance on position within the centre, such as proximity to supermarkets and parking.
- Longer opening hours and larger staff teams, so more active management is required from the owner.
- Rents are the highest of any pharmacy type, often above $500,000 per annum. Rental outgoings are also expensive.
- Large corporate landlords are less likely to provide a long lease.
- Generally require an experienced, retail-savvy owner to be successful. Not recommended for first-time owners
Each pharmacy type carries its own rhythm, rewards and risks. The right fit depends on where you are in your career, the kind of work you find most rewarding, and the level of operational complexity you are ready to take on. A first-time buyer with a clinical background may thrive in a medical centre pharmacy, while an experienced operator with retail acumen might be well-suited to a large shopping centre format. If you are unsure where to start, speaking with a pharmacy-specific broker or adviser is a worthwhile step. Understanding the type of pharmacy that suits you is just as important as finding the right business at the right price.
Written by Will Brown, VIC & TAS State Manager – AP Group
AP Group are the leading pharmacy experts in Australia, helping hundreds of pharmacists into ownership every year – our team can help with sourcing finance for your purchase, as well as providing the right legal advice to help you navigate the process.
We connect existing pharmacy owners with over 5000 ready and eager investors via our cutting-edge online Data Room. Our Data Room keeps confidential listing data secure and allows buyers to make informed decisions on each of our pharmacies for sale.
About the Author:
Will Brown always seems to bring a good mood to the AP Group office. So, perhaps it’s no surprise he’s so positive and pro-active at helping clients with buying, selling, and negotiating pharmacy transactions. In more recent years, he’s added lease negotiations to his offerings, complementing his genuine love for helping pharmacists achieve their goals.
Will understands that pharmacy sales is all about people. Luckily for him, he’s been described as approachable, transparent, reliable and responsive. In his early career, he worked as an English Teacher and Journalist, giving him exceptional communication skills and the ability to present data in its most clear and meaningful form. An asset to negotiations and the AP Group team!