May 15, 2025 | Pharmacy
Q1 2025 Pharmacy Market Update: Momentum Builds Despite Sector Headwinds.
The UK pharmacy market entered 2025 with a surprising surge in acquisition activity. Despite broader economic pressures – including stubborn inflation, ongoing NHS funding constraints and increasing costs as a result of the previous Labour budget – buyer demand for community pharmacies has sharply increased.
Q1 saw a noticeable uptick in average offers based on EBITDA multiples, faster transaction timelines, and renewed confidence from both multiples and independent operators.
Buyer Activity on the Rise
Pharmacy buyers are clearly more active and competitive this year. Strategic acquirers, particularly those with regional consolidation strategies, have re-entered the market with a new sense of urgency. Independent operators are also stepping up, seeing long-term opportunity in local ownership amid an evolving healthcare landscape. Perhaps we can attribute some of this to the recent contract announcements and improved activity payments.
This demand is translating into higher average offers, particularly for well-performing pharmacies with strong dispensing volumes, solid staffing, and desirable locations. Pharmacies that are lean, compliant, well connected to GPs/health centres and with opportunity for growth and improved service offering are commanding even more interest.
The volume of buyer enquiries in response to new listings has increased by around 20% over the course of Q1 and with no sign of letting up.
Faster Deal Timelines
One of the most significant shifts this quarter is the speed at which deals are progressing. Pharmacies that are well-prepared are moving from initial marketing to accepted offer, with agreed heads of terms, in as little as 30–45 days, compared to the 60–90 days seen in previous years. Buyers are less hesitant and more decisive, a signal of the perceived long-term value in the sector and increased appetite.
By way of example, Prospect Estates recently listed two separate independent pharmacies in two different regions which both progressed from listing to sold STC in under 10 days. Speed which we’ve rarely seen in the last 18 months with Lloyds and Boots flooding the market.
First-Time Buyers Stepping Up
Another factor in play is that we’re seeing more first-time buyers stepping up their game to compete with independent buyers and multiples.
It’s no secret that first-time buyers represent a growing portion of pharmacy buyers, but at the same time, those with the credibility and means to buy have been scarce and in high demand.
Based on what we’ve seen in Q1 2025, it seems as though a lot of first-time buyers have recognised the need to be able to demonstrate secure funding, credibility and competitiveness, and have taken action to better prepare themselves to take more businesses off the market.
Working in partnership with Prospect Health, one of the UKs largest healthcare recruitment specialists, Prospect Estates have unrivalled access to pharmacists looking to move in to ownership and we’re well placed to keep you in tune with first-time buyer trends and patterns.
Sector Challenges and the New Pharmacy Contract
This uptick comes amid real challenges. The UK pharmacy sector continues to navigate staffing challenges, rising costs, and increased clinical service expectations under the new 2025/26 Community Pharmacy Contractual Framework (CPCF). While the contract brings welcome clarity and modest funding increases for clinical services, many pharmacy owners are still under pressure to do more with less.
However, this very environment is also prompting a wave of consolidation. Some owners are choosing to exit while valuations are holding, while buyers are banking on long-term upside as the role of community pharmacy in primary care expands.
Our verdict
The outlook for the pharmacy market for the remainder of 2025 looks positive so far – you can follow our blog posts for regular updates and perceived changes.
We urge anyone considering their short and mid-term exit strategy to be mindful of the 4% tax increases coming in April 2026. Whilst the speed of pharmacy transaction has increased, it’s advisable for owners to plan their timelines, and get their ducks in a row, well in advance of a sale becoming a reality.
It certainly feels like theirs a window of opportunity between now and Q1 2026 for pharmacy owners to maximise the net return of their sale.
Considering an exit in 2025?
The market is active, offers are improving, and deal timelines are shorter than. If you’re thinking about selling, now is the time to take action.
Fancy a quick chat?
You can book in with one of our team for a confidential, no-obligation conversation here:
We’d be delighted to share with you more of a detailed market update relating to your geographical area and business profile specifically.
Wishing you healthy margins and happy returns for the remainder of 2025!
Prospect Estates are well placed to help you navigate a successful sale for your pharmacy business. If you would like to chat to an expert please call us on 01423 642190, email us at [email protected] or contact us via our website contact form.
View all our pharmacies for sale HERE
May 15, 2025 | Pharmacy
