Chemist Warehouse’s retail media division has shrunk by almost $150 million over the past two years as it faces a tighter advertising market and increasing competition from rival pharmacies and grocery giants.

The pharmacy giant, which has 637 stores, mostly in Australia, makes a sizeable chunk of its revenue selling promotional space in its stores, online and on TV shows and newspaper liftouts it owns. This category, known as retail media, is worth $1.6 billion according to investment bank Morgan Stanley. Chemist Warehouse accounts for almost a third of that, while supermarket giants Woolworths and Coles are steadily growing.