The strategic moves Chemist Warehouse is making while it waits to close Sigma

While the industry awaits the outcome of Chemist Warehouse’s proposed merger with Sigma Healthcare, the pharmacy giant has been busy executing several critical initiatives across its business.

The ACCC is set to rule on the $8.8 billion merger in early November, but in the meantime, Chemist Warehouse is rolling out a new payment system, expanding internationally and creating new marketing partnerships.

Here are three strategic moves Chemist Warehouse has recently rolled out that may have flown under the radar.

Changing the payment game

Chemist Warehouse announced that it is introducing a QR code payments system to both its online marketplace and 600 stores nationwide.

The ‘pay by bank’ system is expected to roll out in early 2025 and is deliberately designed to sidestep debit and credit card payment surcharges.

Chemist Warehouse has never passed on its transaction costs to customers – instead, it has absorbed the fees – but the QR code system would enable it to avoid these entirely. 

“Because we are a discounter, and work on low margins, these transaction costs represent a big part of our potential profit,” Jack Gance, the company’s chairman, told The Australian Financial Review.

“So, from our point of view, it is important we have a competitive, low-cost payment system. That means we can provide a better service, and a better price to the consumer,” he added.

The announcement comes at a time when the Reserve Bank of Australia is considering banning businesses from passing on merchant fees to customers and will inevitably prompt retailers to take a closer look at the cost of payments.

Chemist Warehouse will not be the first Australian retailer to adopt QR code payments; the pharmacy is following in the footsteps of Muji, Vodafone, MJ Bale and L’Occitane.

Towards the Middle East 

Chemist Warehouse has turned its attention to the United Arab Emirates with the opening of its first Dubai store at Al Ghurair Centre.

Prior to this store opening, Chemist Warehouse’s store portfolio was limited to Australia, New Zealand, Ireland and China.

“We are proud to have officially landed in Dubai this week and celebrate our first store opening within the United Arab Emirates,” Chemist Warehouse director, Mario Tascone said.

“We are committed to providing our UAE customers with an immersive and informative, hands-on shopping experience delivering a wide range of high-quality products at an affordable price point,” he added.

“With a ‘one-stop shop’ model and larger retail format, we are excited to welcome customers into our first store in the country.”

This is the first Australian pharmacy to enter the Dubai market and is set to stock a wide range of products from high to low end in the 1000 square-metre store.

Accelerating digital growth

Chemist Warehouse’s editorial and commercial platform, The House of Wellness, is being integrated into Body+Soul, Australia’s biggest health and wellbeing media brand.

The House of Wellness acts as Chemist Warehouse’s content ecosystem – generating print, digital, social and native content for products and services.

Highlighting a bigger trend at large, brands are starting to adopt a retail media strategy that they can control, and in Chemist Warehouse’s case, own – to ensure media coverage, audience reach and revenue.

It has been widely reported that Chemist Warehouse’s retail media divisions drive 20 per cent of its sales. 

“This partnership significantly expands our wellness platform, allowing us to meet the needs of our engaged audience and drive growth even more effectively for our brand partners,” said Tascone.

“We are excited for The House of Wellness to be part of the Body+Soul network which brings together both companies’ expertise and capabilities with a shared commitment to being Australia’s number 1 destination for health and wellness,” he added.

The new partnership is set to drive further growth for not just Chemist Warehouse but also its suppliers and brand partners.

Positioning Chemist Warehouse as not just a discount pharmacy, but as a marketing machine.

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