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Chemist Warehouse confirms aggressive growth plan for New Zealand

  • News
  • December 7, 2017
  • Sarah Dunn
Chemist Warehouse confirms aggressive growth plan for New Zealand

Australia’s largest pharmacy chain entered New Zealand in November when it soft-launched its first outlet at a former PK Furniture site in Auckland’s St Lukes. The discount-driven retailer offers a very different experience to that of its New Zealand competitors. What are its plans for New Zealand? We found out.

Azman Haroon, pharmacist and director of Chemist Warehouse New Zealand, says the company has “preferred to remain quiet” about its New Zealand plans since launching on November 8. The St Lukes store has seven pharmacists and around 40 other retail and management staff employed.

The soft-launch was intended to give Haroon and his team time to check their operations were running smoothly before a more formal push into New Zealand later on. Haroon will step up Chemist Warehouse’s marketing activity in January 2018, but says the early consumer response was “exceptional”.

Asked about Chemist Warehouse New Zealand’s ownership structure, Haroon says he personally owns and operates the St Lukes branch and licenses the Chemist Warehouse brand from Australia. Future Chemist Warehouse branches in New Zealand will also be owned and operated by franchisees, several of which have already been signed up.

“Ultimately, we aim to open in most suburbs throughout New Zealand,” says Haroon. “Our intention is to partner with local pharmacists because we don’t know Hamilton very well, for example, but the local guy does.”

While Haroon won’t confirm the exact location of Chemist Warehouse’s next store, he says it will be in Auckland and is “very easy to guess”. It will open early in 2018. He expects Chemist Warehouse New Zealand will open five to 10 stores over the next year.

The chain is targeting young Kiwi pharmacists as retail partners and, ultimately, franchisees. Haroon says Chemist Warehouse offers an intern training programme and a clear path to partnership: “To buy a pharmacy, for a young pharmacist out of university, the market’s heavily monopolised.”

Haroon says Chemist Warehouse has copped some criticism from Kiwi competitors since its launch, speaking of attacks on its standards of service. However, he refutes this: “I’ve had not one complaint and hundreds of positive comments.”

“The aggression is, ‘Why are you doing this, why are you dropping prices?’ From our perspective, we need to drop the price, pharmacy healthcare in New Zealand is very expensive… we need to make it more affordable.”

Haroon is bullish about Chemist Warehouse’s competitive prices. He says the chain can offer Telfast 70-packs of 180mg antihistamines for less than half the price its main competitor Green Cross charges for a 30-pack through Life Pharmacies. [Ed: The Register’s research did not support this claim. While Chemist Warehouse’s offering was the better deal at 70 tablets, it was priced the same as Life Pharmacies’ offering at the time we compared the two companies’ online pricing.]

“Consumers in New Zealand have been paying far too much for far too long. Now that we’re here, we’re here to grow the entire pharmacy industry. At the end of the day, consumers will vote with their feet and I can see them being the ultimate winners.”

Chemist Warehouse New Zealand stocks a variety of Australian brands that are new to the Kiwi market, but Haroon says this connection with Australia goes both ways. Chemist Warehouse’s arrival in the New Zealand market has seen Kiwi suppliers start to stock their products in its Australian stores as well, listing Wellington-based supplements supplier Go Healthy as an example.

“Our intention is to purchase as much as we can from local suppliers,” Haroon says. “Even if our initial purchase is from Australia, we will find local suppliers and switch.”

“Initially, they were quite fearful we’d be bringing everything from Australia and cutting them out, but that’s not our intention.”

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