Bestway is hoping its £620m acquisition of The Co-operative Pharmacy will help it become a wholesaler for independent pharmacies.
Speaking to The Grocer this week, Bestway CEO Zameer Choudrey said that although it would not add groceries to the pharmacies, it would trial services to help independent pharmacy operators.
Read our Q&A with Bestway boss Zameer Choudrey
“Over time we hope to provide value added services to the pharmacies just as we do for independents through the wholesale business,” Choudrey said. “We operate a club for 4,000 retailers through Best-one and Best-in. At some point in the future we would like to offer this expertise to independent pharmacies, offering deals, merchandise, format advice and part-investing in store refurbishment and expansion by independents.”
Bestway had been eyeing the healthcare sector for three years, Choudrey admitted. “The demographics are extremely attractive, with an ageing population, and the number of prescriptions is increasing more than 2% per annum,” he said. “It’s also a fragmented industry with independent pharmacists accounting for 45% of the market. This is similar to the convenience sector, though it’s not as competitive as the independent retail market.”
The deal, agreed last week, was financed by a new £650m debt facility and a £70m overdraft. “We have been provided a new corporate facility by our financing syndicate which allows us flexibility to invest in the future.”
Choudrey also insisted Bestway, which has interests in banking and cement in Pakistan, was not diversifying away from grocery.
“We are still interested in investing in grocery. Only last month we bought Sher Bros. We have invested £280m in the last 10 years,” he said.
“For the next two or three years, the focus will be on growing the pharmacy business. Following this, we shall start to look again at investment opportunities, whether it be in healthcare or another industry. We do have some other opportunities to explore.”
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