Questionable health: Increased access to healthcare will boost revenue, but competition will siphon demand

Several franchisees have joined the Pharmacy and Drug Store Franchises industry in an attempt to capitalize on positive upstream trends that are driving demand for pharmacies and drug stores nationwide. These trends include the effects of healthcare reform, which has increased the number of Americans with private health insurance. Additionally, the number of adults aged 65 and older, one of the industry's largest customer segments, has grown considerably over the past five years. Over the five years to 2023, the underlying positive trends that have driven industry growth over the past five years will continue to benefit industry operators. However, the leading franchisors, McKesson Corporation and Cardinal Health Inc., are expected to reach a point of relative saturation...purchase to read more.

Industry Statistics & Market Size
Revenue
$6bn
Annual Growth 13-18
3.4%
Forecast Growth 18-23
Profit
Employment
14,666
Businesses
1,451

Industry Threats & Opportunities

  • Several franchisees have joined the industry in an attempt to capitalize on positive upstream trends
  • The expanding presence of PBMs is expected to increase competition for industry operators
  • Several positive upstream trends are expected to drive demand for industry services
  • Industry Report - Industry Locations Chapter

    The Pharmacy and Drug Store Franchises industry requires chain stores and independently operated stores to have a widespread geographic presence of conveniently located establishments to be competitive. Like most other retail establishments, operators in this industry have found that convenience is a key to success. A company's location and the ability to provide one-stop shopping are significant marketing factors. On average, the distance to the nearest pharmacy from any given location is 1.4 miles, according to the National Association of Chain Drug Stores. Some drug stores aim to increase sales by locating in a strip mall near hardware stores, restaurants, liquor stores, dry cleaning and laundromat facilities...purchase to read more.

    Additional Insights for the Pharmacy & Drug Store Franchises Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pharmacy & Drug Store Franchises Industry are

  • Ability to control stock on hand
  • Participation in pharmacy benefit management (PBM) networks
  • Easy access for clients
  • IBISWorld analysts also discuss how external factors such as Number of adults aged 65 and older and Per capita disposable income in the Pharmacy & Drug Store Franchises industry impact industry performance..

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    What's in this report

    What is the Pharmacy & Drug Store Franchises Industry?

    Franchises in this industry retail a range of prescription and over-the-counter medications, beauty items, toiletries and consumable goods directly to consumers. Reports in our Business Franchise collection focus solely on the operation of franchised outlets. They show the total number of franchise outlets, total franchise revenue and the average profit margin earned by franchisees. Our reports also highlight the largest franchisors by market share.

    Industry Products
  • Generic drug prescriptions
  • Brand-name drug prescriptions
  • Over-the-counter medicines
  • Personal hygiene and cosmetic products
  • Groceries and other food items
  • Health aids and home healthcare equipment
  • All other products
  • Industry Activities
  • Preparing and selling prescription and nonprescription drugs and medicines
  • Advising customers on the use of both prescription and over-the-counter drugs
  • Retailing basic consumable goods
  • Selling other miscellaneous items, such as candy, cosmetics, magazines and light refreshments
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Number of adults aged 65 and older
  • Per capita disposable income
  • Number of people with private health insurance
  • External competition for the Pharmacies and Drug Stores industry
  • Federal funding for Medicare and Medicaid
  • Number of physician visits

  • Current Performance
  • Franchise agreement models
  • Health of the industry
  • Chart: Revenue Growth

  • Industry Outlook
  • Health of the industry
  • Competition, threats and continued growth
  • Table: Pharmacy & Drug Store Franchises Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pharmacy & Drug Store Franchises Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Brand Name Pharmaceutical Manufacturing
  • Cosmetic & Beauty Products Manufacturing
  • Drug, Cosmetic & Toiletry Wholesaling
  • Generic Pharmaceutical Manufacturing

  • Products & Services
  • Generic drug prescriptions
  • All other products
  • Brand-name drug prescriptions
  • Personal hygiene and cosmetic products
  • Over-the-counter medicines
  • Groceries and other food items
  • Health aids and home healthcare equipment
  • Chart: Pharmacy & Drug Store Franchises Industry Products and Services Segmentation

  • Demand Determinants
  • Income and government regulation
  • Higher pharmaceutical usage

  • Major Markets
  • Consumers aged 65 and older
  • Consumers aged 55 to 64
  • Consumers aged 45 to 54
  • Consumers aged 35 to 44
  • Consumers aged 25 to 34
  • Consumers aged 25 and younger
  • Chart: Major Market Segmentation for the Pharmacy & Drug Store Franchises Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Pharmacy & Drug Store Franchises

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pharmacy & Drug Store Franchises Industry

  • Industry Globalization
    McKesson Corporation, Cardinal Health Inc.,
  • Table: McKesson Corporation - financial performance
  • Table: Cardinal Health Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pharmacy & Drug Store Franchises Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pharmacy & Drug Store Franchises Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Federal funding for medicare and medicaid (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Blockbuster Drug
  • A drug product that generates annual sales in excess of $1.0 billion.
  • Formulary
  • A list of medicines that are covered by a health insurance plan and always meet Medicare's requirements.
  • Front-End Sales
  • Sales of products from the front of the store or products sold separately from the pharmacy.
  • Over-The-Counter Medications (Otc)
  • Medicine that can be purchased without a prescription.
  • Pharmacy Benefit Manager (Pbm)
  • A third-party administrator of prescription drug programs.
  • Prescription Drug
  • A licensed medicine that can only be obtained with a doctor's approval.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s industry research report on Pharmacy & Drug Store Franchises can be used to help you understand the industry’s market size, growth potential and major companies. Five-year forecasts provide insight into the industry’s prospects, so you can make decisions with confidence. This information is perfectly suited to informing your business plans, pitch books, benchmarking and SWOT analysis.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Pharmacy & Drug Store Franchises:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pharmacy & Drug Store Franchises market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pharmacy & Drug Store Franchises, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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