Pharmacies & Drug Stores in Canada Industry Market Research Report Now Available from IBISWorld

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A greater number of companies are likely to enter the industry as higher revenue encourage the industry to expand; however, competition from alternative retailers will continue to pose a threat, despite this expansion. For these reasons, industry research firm IBISWorld has added a report on the Pharmacies and Drug Stores industry to its growing industry report collection.

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Competition will rise as more companies enter the industry for their share of rising revenue

The Pharmacies and Drug Stores industry is growing. Revenue growth is determined by health expenditure, disposable income, the number of people aged 65 years and older, and external competition. During the five years to 2013, industry revenue has grown at an estimated annualized rate of 2.6% to $33.3 billion, including anticipated growth of 2.9% in 2013 alone. Sustained increases in health expenditure, rising disposable income and an aging population have underpinned this growth. “The recession that started in 2008 and continued through 2009 did not hinder the industry; the majority of industry revenue (about 65.0%) derives from prescription and nonprescription drugs, which are typically considered essential goods. Therefore, even during times of weak economic activity, demand for the industry remains stable,” says IBISWorld industry analyst Anna Son.

Although industry demand has risen during the past five years, health expenditure has grown at a slower rate. In 2013, provincial and territorial government health expenditure is expected to grow 3.4%, the lowest increase since 1997, according to the Canadian Institute for Health Information (CIHI) and IBISWorld estimates. “The slowdown in healthcare spending is a result of governments trying to control rising healthcare costs,” says Son. According to CIHI data, Canada has the second-highest per capita drug spending among eight comparative Organisation for Economic Cooperation and Development (OECD) countries. The Pharmacies and Drug Stores industry has a moderate level of market share concentration. In 2013, the largest companies include Shoppers Drug Mart, Katz Group Pharmacies Inc. and Jean Coutu Group PJC Inc. Over the past five years, market share concentration has remained relatively stable. That said, larger companies have been able to gain market share through mergers and acquisitions. For example, in 2012, major player Katz Group Pharmacies acquired Ontario-based Dell Pharmacies. According to the Chain Drug Review, a chain drug store industry news publication, organic growth, store closings or share losses by weaker chain and independent (i.e. non-chain) stores will generate the majority of market share gains over the next five years.

Revenue is projected to continue expanding during the next five years, with health expenditure and per capita disposable income expected to continue rising. As a result, a greater number of companies are likely to enter the industry; over the same period, the number of industry operators is expected to increase. Despite this expansion, competition from alternative retailers will remain a key feature of the industry. For more information, visit IBISWorld’s Pharmacies and Drug Stores in Canada industry report page.

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IBISWorld industry Report Key Topics

This industry retails a range of prescription and over-the-counter medications, health and beauty items, toiletries and consumable goods directly to consumers on a walk-in basis. Industry companies may also provide basic health and photo processing services. The industry includes retail stores with a pharmacy, but excludes mail-order and online retailers, hospitals and clinics.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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