GOOD PRICE IN ACQUISITION STRATEGY
Written on the 9 May 2014
GOOD Price Pharmacy has acquired two Oze Pharmacy stores in its effort to hit its ambitious double-digit growth target.
The two stores, based in Penrith and Castle Hill, make for a total of nine Good Price Pharmacy Warehouse stores across New South Wales, out of a total 54 stores across the country.
A further two Oze Pharmacy acquisitions are expected for later in the year.
The company has an annual turnover of more than $200 million and has set its expansion target at 20 per cent by the end of FY15.
Founder and director Anthony Yap says the future growth of the brand would be fuelled by both greenfield sites and strategic acquisitions.
“Acquisitions allow companies to establish brands more quickly than if they dependent solely on greenfield sites, which effectively involves starting from scratch,” he says.
“The recent move of two Oze Pharmacy stores into the Good Price Pharmacy Warehouse brand gave us an immediate footprint in a state where our presence was relatively low. We were able to build brand awareness through the stores’ existing customer base without having to invest heavily in advertising.“It also sets a precedent in the industry which I believe will lead to further consolidation of ‘like’ models to create a brand with a much bigger national footprint.”
Yap says the acquisitions have created a framework that can be used for future consolidation.“Our franchise infrastructure has been created with a view to supporting a much bigger network of stores which will help facilitate further merger and acquisitions activity over the coming months.”
He says that consolidation of smaller brands and independents within the pharmacy industry is essential to create bigger brands with a more sustainable future.“Acquisitions allow existing stores to leverage the proven systems and procedures that have been developed by the brand over time,” he says.
“The conversion process often leads to immediate increases in both turnover and profitability as efficiencies and economies of scale reduce operating costs and drive turnover through greater brand awareness and increased brand marketing.“Good Price Pharmacy Warehouse aims to create a network of stores that have sufficient economies of scale and market power to compete against the biggest players in the market, including supermarkets and discount department stores.”
The two new Sydney stores will open their doors to customers in May and July 2014.