Page 38 - rp-may-2020

BUSINESS THROUGH INNOVATION RETAIL MANAGEMENT 36
RET AIL PHARMA C Y • MA Y 2020
COPING WITH COVID-19 EFFECTS NOW AND LATER
R
epresenting both a health
and economic crisis, the
COVID-19 pandemic will
have a lasting impact on
community pharmacies, which have
a major role to play.
The world economic landscape has
changed. We’re in uncharted waters with
no real guidance on how to deal with
the effects of the virus spread. But, like
all other economic downturns, it will last
for only a limited time.
With COVID-19 restrictions expected
to be in place for the next three to six
months, some longer term damage is
likely for both the Australian and world
economies, which may last several years.
However, community pharmacy is well
placed to deal with these extraordinary
and shocking times. Pharmacies can
trade during the COVID-19 period of
changes affecting the retail property
industry (notwithstanding the fact that
many surrounding retailers will be
closed for a while).
The government is doing what it can
to avert a depression in Australia with
its ongoing stimulus packages and
job-keeper scheme, trying to keep
businesses open and protect the
hundreds of thousands of jobs at risk.
It will continue to be nimble in changing
policy where appropriate to maintain a
correct balance in managing the health
risk versus keeping the economy alive.
The importance of relationships
The COVID-19 crisis has highlighted the
importance of pharmacists/pharmacy
owners’ relationships with not only their
staff, but with the general community
and landlords as well.
Staff
Pharmacists and their staff are in
the frontline of the COVID-19 crisis.
There will continue to be much stress
in simply getting the work done at the
pharmacy, with so many demanding,
frustrated and scared clients.
Many pharmacists are being harassed
and bullied by insecure, demanding
customers struggling to cope with the
crisis. But these difficult times will help
pharmacists and their staff cement a
strong team for the future.
Community
Pharmacists have always been highly
regarded by their community and now
are regarded as even more important for
the future of primary health. This is a time
when community pharmacy especially
can secure customers for the longer
term. It’s important for pharmacists to
listen to and communicate with these
demanding, challenging customers
who, in most cases, are only seeking
some comfort and reassurance from the
professionals they trust.
Landlords
The COVID-19 crisis has also raised the
importance of community pharmacy’s
specific relationship with landlords,
which are appreciating the importance
of having a pharmacy within their core
tenancy mix.
The landlords’ rental assistance over
the next couple of years will fall into
the categories of short-term rental
assistance and economic performance
post COVID-19.
The relationship between a landlord and
a pharmacy tenant is complicated when
it comes to COVID-19. The government
wants shopping centre owners and
retailers to recognise that they both have
a mutual interest in business continuity. It
also wants landlords and retailers to talk
about their relevant issues and to work
towards agreed outcomes.
The government hopes that retailers
will provide accurate business records
to landlords, which can assess different
cases on their merits. Leases must be
dealt with case by case to determine
whether there has been financial
hardship due to the crisis.
Community pharmacies that may
have had a very strong March
performance will be finding the
following months to be very tough.
The performance will be negatively
influenced by supply issues and the
closure of many surrounding retailers.
Different landlords will provide
different levels of assistance to lessees,
but pharmacy lessees should take this
opportunity to get some substantial
rental assistance to enable them to
trade through the crisis.
Economic performance
post COVID-19
Pharmacists should also be seeking
to undertake new lease renewal
negotiations now, while we have this
severe economic downturn. Even if
your lease doesn’t expire for two years,
start talking to your landlord now.
Many vacancies in a shopping centre
or building may offer the opportunity to
secure a better physical location within
an existing retail tenancy mix.
Implications for
community pharmacy
We’re in a unique situation where
pharmacists must stay close to their
customers, who are looking for
leadership from community pharmacy.
This is an opportunity to also secure
temporary substantial retail assistance
as a result of COVID-19 and to also
secure excellent commercial terms with
an early lease renewal negotiation.
Don’t be in a position where you’re
negotiating a lease renewal when the
economy is about to boom.
These challenging, uncertain times
require pharmacists to take charge with
their landlords. It’s not the time to sit
back and be passive.
Bruce Engeman.
Professional Property
Advocate Engeman Retail
Bruce Engeman
is an independent,
professional property advocate who works
exclusively for pharmacy operators. He started
Engeman Retail in 2008 and has handled
pharmacy negotiations hundreds of times
over the past six years.
Inquiries:
bmengeman@bigpond.com
or 0418 470 175.