Healthy growth: Revenue is expected to grow as pharmaceutical demand increases

Over the five years to 2018, the Pharmacies and Drug Stores industry in Canada has benefited from the fact that pharmaceuticals currently comprise the second-largest health expenditure in Canada. While rising pharmaceutical prices have bolstered industry revenue, many provincial drug programs have restricted prescription prices to cut healthcare costs to consumers, hurting industry operators. Nevertheless, many pharmacies and drug stores have been able to generate strong revenue streams from generic drugs. This growth is expected to continue over the five years to 2023, as pharmaceuticals continue to account for a large share of health more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23

Industry Threats & Opportunities

  • Many pharmacies and drug stores have been able to generate strong revenue streams from generic drugs
  • The burgeoning baby boomer population has driven demand for prescriptions
  • Demand for pharmacists will rise as industry operators expand their preventative services
  • Industry Report - Industry Investment Chapter

    The Pharmacies and Drug Stores industry in Canada exhibits a low level of capital intensity. In 2018, for every $1.00 spent on labour, the industry incurred an estimated $0.05 in capital costs. Labour costs make up 14.3% of industry revenue, which represents a slight decrease over the past five years, which keeps capital intensity at bay. Furthermore, many pharmacies and drug stores have required technicians and employees to provide customer service, dispense medications and provide value-added services, such as health and wellness counselling, contributing to wages’ relatively high share of industry revenue compared with the broader retail sector. Despite this trend, many pharmacies and drug stores have mitigated the effects of higher wages by hiring more part-time and contract labour...purchase to read more.

    Additional Insights for the Pharmacies & Drug Stores Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pharmacies & Drug Stores Industry are

  • Ability to control stock on hand
  • Superior financial management and debt management
  • Proximity to key markets
  • IBISWorld analysts also discuss how external factors such as Total health expenditure and Per capita disposable income in the Pharmacies & Drug Stores industry impact industry performance..

    shopping_cartPURCHASE OPTIONS

    What's in this report

    What is the Pharmacies & Drug Stores Industry?

    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 Products
  • Prescription pharmaceuticals
  • Nonprescription pharmaceuticals
  • Eyewear and eye care
  • Other home health products
  • Personal and beauty products
  • Infant care products
  • Industry Activities
  • Preparing and selling prescription and nonprescription drugs and medicines
  • Retailing basic consumable goods
  • Selling other miscellaneous items, such as candy, cosmetics, magazines and light refreshments
  • Advising customers on the use of both prescription and over-the-counter drugs
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Total health expenditure
  • Per capita disposable income
  • Number of adults aged 65 and older
  • External competition for the Pharmacies and Drug Stores industry
  • Research and development expenditure

  • Current Performance
  • Industry landscape
  • Competition intensifies
  • Chart: Revenue Growth

  • Industry Outlook
  • Industry landscape
  • Competition intensifies
  • Table: Pharmacies & Drug Stores Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pharmacies & Drug Stores Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers in Canada

  • Key Selling Industries
  • Brand-Name Pharmaceutical Manufacturing in Canada
  • Cosmetic & Beauty Product Manufacturing in Canada
  • Generic Pharmaceutical Manufacturing in Canada
  • Pharmaceuticals & Pharmacy Supplies Wholesaling in Canada
  • Soap & Cleaning Compound Manufacturing in Canada

  • Products & Services
  • Prescription pharmaceuticals
  • Nonprescription pharmaceuticals
  • Personal and beauty products
  • Other home health products
  • Other
  • Infant care products
  • Eyewear and eye care
  • Chart: Pharmacies & Drug Stores Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Public health insurance
  • Private health insurance
  • Out-of-pocket expenditures
  • Chart: Major Market Segmentation for the Pharmacies & Drug Stores Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Pharmacies & Drug Stores

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pharmacies & Drug Stores Industry

  • Industry Globalization
    Shoppers Drug Mart, Metro Inc., McKesson Canada, Pharmasave Drugs National Ltd.,
  • Table: Shoppers Drug Mart - financial performance
  • Table: Metro Inc. - financial performance
  • Table: McKesson Canada - financial performance
  • Table: Pharmasave Drugs National Ltd. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pharmacies & Drug Stores Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pharmacies & Drug Stores Industry
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Total health expenditure (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Blockbuster Drug
  • Widely used pharmaceuticals that generate more than $1.0 billion annually in revenue for the developer.
  • Front-End Sales
  • Sales of products from the front of the store, or products sold separately from the pharmacy.
  • Over-The-Counter (Otc) Medications
  • Medicine that can be purchased without a prescription.
  • Prescription Drug
  • A licensed medicine that can be obtained only with a doctor's approval.
  • Workers' Compensation Board
  • A nonprofit mutual insurance corporation financed by employers' contributions, with a statutory mandate from the province.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Pharmacies & Drug Stores market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Pharmacies & Drug Stores:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pharmacies & Drug Stores market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pharmacies & Drug Stores, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

    Contact Us

    Want to speak to a representative? Call us.