Centrofarm, which operates a network of 33 drugstores, most of which in Bucharest, will focus on opening larger outlets than the market average in the future
"Centrofarm developed in the former locations of state-owned pharmacies, having thus access to large areas. I believe Centrofarm drugstores have more than 150 square metres on average," Dorin Catana, Centrofarm general manager told ZF.
He says he will not embrace an aggressive expansion plan, but "look at emerging opportunities" instead.
Domestically, the average area of drugstores is of less than 100 square metres, and most networks are included in this category. In mid-2005, Centrofarm started an extensive repositioning process, with the network being the oldest entity operating on the pharmaceutical retail segment of Bucharest.
Though investments in Centrofarm's new "look" were launched in 2005, most of them were made last year.
The repositioning process, however, did not entail just space reorganisation.
"We started organising in terms of management. At present, we have 280 employees, from 220 in late 2005. The old Centrofarm did not have well-defined positions on this management segment. There was no marketing department, for instance," he stated.
Centrofarm has recently opened the biggest store of the group, of 240 square metres, within the Auchan hypermarket.
The company also operates such outlets in Bucuresti Mall in Vitan, Carrefour Orhideea, Cora hypermarket in Pantelimon and in City Mall.
Catana says the development of drugstores in shopping centres will depend on market opportunities.
"The incomes drugstores get from drug sales are limited by the uppermost margins imposed by the Health Ministry.
At present, drugstore networks are not profitable generally given that drug prices are set by the Health Ministry and margins are thus very small. Still, higher margins can be derived from the sale of cosmetics and parapharmaceuticals," says Catana.
Drug sales are expected to rise by some 15% this year, with sales through drugstores projected to grow beyond this level.
"We should see higher growth (than 15% i.e.) mainly by increasing the weight of cosmetics and technical-medical products in overall turnover," says Catana.
Sales of cosmetics and dermato-cosmetics are likely to see higher growth this year in drugstores as an increasing number of people will switch from mass cosmetics to specialised dermato-cosmetics.
Centrofarm's majority shareholder is Generalcom company. In 2005, Centrofarm generated turnover worth over 8 million euros. Centrofarm's rivals are Sensiblu, Help Net, Catena, City Pharma, Dona. Due to the tight competition, none of the networks managed to derive income of more than 1 million euros.
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