Battle of the chemists reignites as Sigma looks to rebrand

Sigma Healthcare’s boss says he’s not spooked by the scale of competitors such as Wesfarmers-owned Priceline as he looks to amp up competition among pharmacies with a reboot of Sigma’s chemist chains.

Vikesh Ramsunder said he’s determined to carve out a new niche in the sector for his company by narrowing its portfolio of brands, which include PharmaSave and Chemist King, to operate Sigma’s pharmacies under just the Amcal and Discount Drug Store names, by boosting customer loyalty programs, building up a range of private label products and focusing on preventative healthcare.

“It’s moving from a focus on driving wholesale growth to retail growth,” he said.

After a challenging start to his first year as chief executive; Sigma boss Vikesh Ramsunder is ready to work on future strategy.

The pharmacy sector became hot property as the country emerged from the pandemic, and major retailers have taken notice, including Wesfarmers, which acquired Priceline operator Australian Pharmaceutical Industries last year.

Sigma has experienced turbulence, however, after a troubled rollout of a new software system caused headaches for order deliveries across its wholesale business and resulted in big disruptions to customers this year.

Ramsunder, who moved from South African retailer Clicks Group to become Sigma’s chief executive in February, said that situation has stabilised, and it was time for him to “prove that we can consistently be excellent again”.

Part of his long-term strategy for the business is to differentiate the Amcal and Discount Drug store brands from rivals including Chemist Warehouse and Priceline Pharmacy. The major pharmacy chains have already cemented their market positions and “there is no need to go head-on”, he said. Instead, the goal is to create a third option for customers through a brand focused on holistic healthcare and highly experienced staff.

“You are not just catering for those coming to the pharmacy, but also healthy people,” Ramsunder said.

Sigma has a market cap of $637 million - a fraction of the $54 billion value of Priceline’s parent company, Wesfarmers. But Ramsunder is not fazed by the scale of its rival’s owner.

“They experience the same opportunities and challenges as us. It doesn’t matter how much capital you have within the holding company.”

Because pharmacy networks involve franchise stores, both companies are competing to offer the best opportunities to the pharmacists that join their brands, he said.

COVID lockdowns might have ended and demand for vaccines and personal protective equipment abated, but Ramsunder said the pandemic has had a lasting impact on consumers, who know the value of pharmacies and are relying on them as a first point of call for healthcare.

Chemists are still playing a vital role in pandemic responses, including helping meet demand for antivirals as Australians look to protect themselves against the virus.

“Demand is significantly higher than last year,” Ramsunder said. “We are seeing that in our numbers.”

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