Magazine article Drug Topics

Annual Business Outlook: Smoother Sailing Ahead?

Magazine article Drug Topics

Annual Business Outlook: Smoother Sailing Ahead?

Article excerpt

To find out what community pharamcy owners and managers expect in 1993, Drug Topics mailed a two-page questionnaire to 1,000 independent store owners and 450 chain headquarters executives nationwide in September. We received a total of 793 usable replies: 607 questionnaires from independents, for a response rate of 61%, and 86 from chain drug executives, for a response rate of 19%.

Responses were tabulated by Crosstabs of Syosset, N.Y., and data were analyzed by Drug Topics' research department and by the editorial staff Anecdotal material in the articles was culled from responses to the questionnaires or was developed from interviews with experts in the field.

Our cover story is the end result of many people on this magazine working together--researchers, writers, editors, artists, producers. We hope that these articles and the survey results will be of significant assistance in enabling you to prepare for next year.

Like most Americans, pharmacists are looking at 1993 with hope, tempered by caution and realism. Independent and chain pharmacists have felt the chill of the recession for the last couple of years, just as most businesses in this country have. While few are making rash predictions that the recession is over, there's hope out there that the economy will move ahead, buoyed by a new President and a Congress that knows the public voted for change and that they expect action.

Independent drugstore owners appear to be more optimistic about overall business in 1993 than they were last year. Some 17% rated the outlook for the year ahead as excellent to very good, up from 11% in 1992. A majority of independents--75%--see good to fair times waiting for them, up slightly from last year's 73%. The most negative group--totaling 8%--predict a poor year coming up. This is an increase from last year, when 5% saw bad times on the road ahead.

Of the drug chain sample, 12% are looking forward to a very positive '93, and 77% are generally upbeat. Only 11% had a bearish view of the upcoming year.

Independents see hope: The picture improves when independents were asked how business in their own pharmacies is likely to turn out in '92. Some 24% of independents believe it will prove to be a very good to excellent year. A substantial 67% expect that their bottom lines will be good to fair, while 9% said they see 1992 shaping up as a poor year for their stores.

At the time the survey was taken in the early fall, a whopping number of independent pharmacists (79%) said they believe we are still in recession, while 14% said, No, we're not. A small number--7%--said they did not know.

Asked whether it's likely that the economy will pull out of the recession in '93, 48% of independents said Yes, but as if to show how much confusion there is around, 47% answered No; the most bearish group, 5%, said that we would not make that transition next year.

To pin down the story further, independents were asked by Drug Topics when they thought the country would pull out of the recession. Setting aside their Optimism, 50% of independents said they expect that it will be 1994 and beyond before we can breathe easy again on the economy. Nineteen percent voted for the fourth quarter of '93 as a likely time for improvement; 15% leaned toward the third quarter; and 14% opted for the second quarter. Finally, a scant 2% saw the recession ending as early as the first quarter of 93.

A fair number of chain executives--14%--thought that business in '92 would be very good to excellent. A major portion--79%--said they expected good to fair results, and only 7% guessed that bottom lines would be poor.

Chains look at recession: When asked if we were still in a recession, a larger group of chain executives--78%--said a firm Yes, while 15% said No, and 7% said they didn't know. Those who answered affirmatively were asked if they thought we would pull out of the recession in '93. The responses split nearly down the middle, with 49% thinking this was likely, but 51% of chain respondents saying this was not in the cards. …

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