Dispensed: The Co-operative Pharmacy’s rich and caring history

The Co-operative Pharmacy has a rich history of serving members in various different forms for over 100 years – but within the next few months the Co-operative Group’s division is expected to be in private hands following a sale to Bestways to reduce its deficit.

Early beginnings

As early as 1906, co-operative retail stores were selling medicine, but as a condition of supply, the Proprietary Articles Traders Association demanded that societies should not pay dividend on these articles.

In response, the Co-operative Wholesale Society (a predecessor of the Group) started to manufacture and distribute the medicine themselves to allow a dividend. In April 1928, CWS started to manufacture drugs for societies. Two years later, CWS expanded into the pharmaceutical sector when it took over the Co-operative Sundries Manufacturing Society, which produced chemists’ goods, to form the CWS Drug Works in Droylsden.

The National Co-operative Chemists

The National Co-operative Chemists (NCC), which now trades as the Co-operative Pharmacy, was established in 1945, at a time when the then Labour government was discussing setting up the National Health Service. With the creation of the NHS in 1948, the CWS, as well as independent retail societies, realised that they needed to offer new services.

Although some of the larger societies had already established chemists as specially registered societies, there were many areas that had no co-operative pharmacies. Once the NCC was formed, various retail societies expressed interest for the NCC to open branches in their trading area.

By January 1946, the NCC had 51 society members, which agreed to transfer their chemist’s shops and not to open any other shops in competition with the NCC. The first branch opened on 6 February 1945 in Bargoed, South Wales. By 1946 they had opened ten brances in the Manchester area, one in Newcastle and four in the Cardiff area. Another 33 branches were opened over the following 11 years.

As the NCC was prevented by the Pharmacy and Poisons Acts from running shops other than pharmacies, in 1960 it set up a subsidiary, Society Specialists, to run drug stores. The NCC faced its first crisis in 1968 when it was forced to cut costs in order to survive, due to a pricing policy introduced by the government. No redundancies were made, however.

Branches that were not profitable were either closed or transferred to Society Specialists Ltd for operation as drug stores. The number of NCC branches fell from 112 in 1968 to 76 in 1976. The decline led to a programme of branch modernisation in 1971, with the appointment of a sales manager. The recovery was fast and the number of branches began to rise again in the late 1970s, with an expansion of a much greater scale in the 1980s. In 1979 all employees received a bonus equivalent to half their weekly wage.

From the 1980s till the present

Hughie Todner, former chair of National Co-operative Chemists (1981-1997), has been working for the co-operative sector for 46 years. He became involved in the movement aged 14, when he left school to work for his local co-operative. In 1981 Mr Todner was elected to the board of the CWS and in the same year he became chair of the NCC, a position he held for 16 years.

“When I got there I realised it was a wonderful organisation, with wonderful potential and making a wonderful contribution to ideas of co-operation,” he said.

The business, explains Mr Todner, has never made big profits, but has not made losses either. “We decided a long time ago that we weren’t going to make substantial profit but make a profitable contribution,” he says.

To expand its shops, the NCC built up a team of professionals to run the stores. “Chemists got degrees in pharmacies but had no experience in running a shop,” says Mr Todner. To address this, the NCC developed a business management training course for chemists.

The number of branches reached 152 by 1985, with a turnover of £22.6m. In 1985, the NCC was the first co-operative to make use of computerised management information systems. Full health screening services were introduced in some branches, while others included a “babywise” department or specialist sections for foot care, cosmetics and medicines.

Unlike other pharmacies, the co-operative pharmacies within the NCC carried merchandise and stock more than required to run the business to ensure they did not run out, which helped attract more customers.

“We were different from competitors because we believe in the principle of the co-operative movement’s giving service to customers,” said Mr Todner. He thinks the NCC also acted as a buffer, with other firms unable to sell products more expensive than co-operative pharmacies.

When taking over pharmacies from local societies, the NCC was also upgrading all chemist shops, using similar branding across the different societies.

Over 230 branches had opened in England, Wales, Scotland and Northern Ireland by 1995, when the society was employing more than 1,500 staff and had a turnover of £95.8m.

The Co-operative Pharmacy has been a pioneer in the industry. In 2001 it became the first UK pharmacy to promote the use of Braille on the packaging of its own-label medicine and, in 2012, it became the first retail pharmacy chain in the UK to become carbon neutral. 

The Co-operative Pharmacy is now the third largest in the UK and the largest in Wales. Last year it reported total revenues of £760m and operating profit of £33m. However, sales declined by £4m compared to the previous year.

A profitable business

Mr Todner says the sale of the pharmacy division is a great loss for the Co-operative Group because the business has been profitable.

He added that the Co-operative Pharmacy had helped those in the pharmacy business develop co-operative principles.

Mr Todner also says that, although the Group’s board had said the pharmacy business was no longer part of their long-term strategy, some directors on the board represent independent societies, which run chemist shops and would continue to keep them.

“I gave 16 years of my life to the NCC and it’s all being destroyed,” he says. “We built a wonderful chain of pharmacies. We built that over many years and it’s all gone.”