A Business Trend

This week, the German Federal Ministry of Economics came out with a report that centered on pharmacy operations in Germany.

It's an interesting dilemma that is developing. Based on data, going back three years ago, there are roughly 7,600 pharmacy store-fronts in the country which are in serious economic trouble.  Most of them, probably over 75-percent....are in urban areas or major cities. 

The background to this is that most of these 7,600 shops are marginally making enough to survive.  Long-term....their odds are dismal.

Chief reasons?  The Ministry listed out the two obvious ones: online purchases and low store numbers. 

I would offer my own analysis at this point.

If you traveled around West Germany in the 1970s and 1980s....there just weren't the density of drug shops that exist today.  In Wiesbaden, with a population of 285,000....today, there's a minimum of forty shops existing.  In the mid-80's, there were probably in the 25-to-30 shop range.  There's been some major growth underway since the 1990s, and frankly.....there are too many for the number to survive....especially with online sales possible.

I can even note my German wife's shopping habits here.  If the doctor prescribes anything of a controlled nature....she has no choice but to use the local pharmacy. Beyond that?  She buys from an online shop about every four months....bunching three to five items into the delivery order.  These online shops don't even have to operate within Germany itself....they can be in the Netherlands or Austria. 

The other thing you tend to notice is that pharmacy operations in small towns, especially in rural areas....have shut down.  Folks that exist in a 1,000 person town today....will rarely have a pharmacy (the profits just aren't there).  You can even see the trend where larger towns with 2,000 residents are having trouble with pharmacy shops existing. 

What I see in twenty-five years?  I think half the pharmacy shops in Germany will be gone.  It's a craft that won't require as many college-educated people.  It won't surprise me if Wiesbaden shrinks it's shops down to six-to-eight shops total.  The mail-order business?  It will simply expand and grow.  There's just not any reason to maintain a store-front.