In the 1980’s, despite having been forced to change its trading policy from one of an annual rebate to one of monthly cash-settlement discount, UniChem continued to make excellent growth in turnover and net profit. From a turnover of £217m in 1981, the total rose to £440 million in 1985, and profit figure showed an even better growth rate. By that date, UniChem membership had reached over 5,000, i.e. over half of the independently owned pharmacies in Britain.
1981 saw Walthamstow branch moved to larger and more modern premises, which enabled it to house all of UniChem’s inventory, including counter lines. By this date, over 2,000 members were using the company’s “Prosper” electronic order terminal, and more than 200 had ordered and received one of the new, fully computerised prescription labelling machines.
This was also the year that Ken Rutter retired from the Board after seven years service, to be replaced by Theo Johnson of Edinburgh.
On the 30th March 1982, a disastrous fire, that saw the Kingston branch literally burnt to the ground, was taken in the company’s stride. Almost all of their members received a delivery the next morning, and by April 1st, medical deliveries were back to normal, via the other branches. This was a magnificent feat of improvisation and organisation. By June, a new building had been leased, converted to the branch format, and had become operational. It was at Chessington in Surrey, and had formally been a cosmetics factory owned by Max Factor.
Also on the site and included in the lease, was a semi-derelict office block. Later in 1982, when faced with a huge rise in rent at the Head Office in Morden, the decision was quickly taken to refurbish and greatly extend this office block as company headquarters. This major project went extremely smoothly, and the decision to move there was never regretted. The actual office move took place in May 1983, and twenty years later, the Head Office of UniChem Wholesaling was still very comfortable in the same building.
Sadly, in 1983, after 20 years as manager of the Leeds branch, John Talbot retired. Famous for blunt speaking, he was a great operations man, and many a UniChem branch manager had learnt a lot from him.
In 1984, the branch network of 12 was reduced to 11, with the members served by the Sheffield branch all consolidated into the new larger Leeds building.
The Sheffield building was then converted into a specialist warehouse for storage and the assembly of orders of Chemists sundries, such as face cloths, delivered to members on a twice-weekly basis, using a truck and trailer for inter-branch delivery, for onward delivery by the member’s normal van.
Changes in branch locations came thick and fast in the mid-80’s, to cope with the company’s expansion. In 1983, Leeds and Nuneaton both moved to new modern airy buildings. Nuneaton’s new site was in Hinckley, so the branch name was changed accordingly. The Croydon branch moved to a massive 74,000sq ft depot in 1986. Simultaneously, “a state of the art” 70,000 sq ft warehouse was being built for Preston. This “green-field” site was on the edge of the town, ideal for the M6 motorway, and a world away from the original Barnes and Crompton three-storey warehouse, with its terrible traffic congestion. The company was certainly moving on and, still in the same year, new extensions were being built at Exeter, at Chessington and at Walthamstow. It was certainly all happening!
There had also been changes in the Board personnel. During this period, three of the non-executive directors had retired, Bill Rucker (1984), Frank Jamieson (1986) and Ken Seal (1985), all shown on the left. Happily all three of the replacements, Jim Buchanan, David Liddington and Mike Smith, shown on the right, fitted in at once. There were also changes in the ranks of the full-time executive directors. Mike Palmer and John Thompson left the company, and their places were taken by Bill Hart (Marketing), and Kelvin Hide (Operations). Jeff Harris, had previously been recruited as Company Secretary from Spicer and Pegler, UniChem’s auditors, He was now promoted to the position of Finance Director. In addition to these changes, the Board Chairman, Norman Sampson, had retired in 1984, having completed his five year tenure, and he had been succeeded by David Mair.
During these years of change in senior appointments and in branch locations, one trend that remained consistent was the good sales growth achieved by the company. Gross turnover rose from £217m in 1981, through £371m in 1984, to £544m in 1987. Profit showed a similar climb with £17m in 1981, £31m in 1984 and £48m in 1987.
The market place became a little tougher, when, in 1984, UniChem’s principal competitor, Vestric, was taken over by AAH Ltd, who then merged it with Hills of Nelson, thereby creating the largest pharmaceutical wholesaler in Britain. As a result of this injection of capital, the discount levels which they were offering became more aggressive.
This was backed up by an improved ordering system called “Link”. However, despite this extra competition for customers, UniChem’s market share continued to grow satisfactorily.
The marketing picture for this period tells a story of an increasingly ambitious advertising campaign for both own-label and branded goods, featuring numerous TV appearances by well-known personalities such as Felicity Kendall and Liza Goddard. The company’s annual spend in this area had risen to over £1.5m in 1986, which at that time was an unheard-of figure for a pharmaceutical wholesaler.
Moving into 1987, all other events involving the company were overshadowed by the news that the Board were actively considering a scheme which could result in a flotation on the London Stock Exchange. However, the executive still had plenty of other activities to occupy their minds as the business continued to thrive.
Toward the end of this period, in 1987, UniChem ventured into manufacturing. A joint investment was made with a Norwegian woodpulp manufacturer, Foller Industria A-S, as a result of which, a jointly-owned company, Neptune Industries, was created. A factory was built at Rochester, in Kent, to manufacture all-in-one nappies, both as the UniChem Brand, and for sale to other groups of own-label marketeers. For a variety of reasons, this project never became a real success, and was finally shut down in 1992.
Marion Rawlings retired from the Board in 1987, as she was to become the President of the Royal Pharmaceutical Society in 1988. Seen here receiving a bouquet from the chairman, David Mair, she had completed more than fifteen years as a UniChem non-executive director.
On a more business-like topic, the Loans and Guarantee scheme by which many young pharmacists were helped to buy a first pharmacy, or to improve their existing business, was still going strong. UniChem agreed to guarantee the bank overdraft of suitable pharmacy purchasers, and by 1987 the company was receiving more than 100 enquiries per month of this nature. A separate department was set up at UniChem’s Head Office to deal with these transactions. These loans and guarantees all carried with them a full commitment on the part of the recipient, to maximise his or hers wholesale purchases from UniChem. It was a good method of ensuring future sales turnover, as well as beneficial to “privately-owned pharmacy”. As such, it was a popular scheme with UniChem members.
For several years UniChem had been cultivating any way of making connection with Members of Parliament, who had a known interest in health matters. In 1988, Mrs Edwina Currie, at that date a very prominent Junior Health Minister, paid an official visit to UniChem’s Head Office at Chessington. Unfortunately, the day of the visit (December 3rd) clashed with the infamous salmonella egg crisis and therefore she was only able to stay for a short while. However, she was very professional, and it did provide a “photo-call” for Peter Dodd.
This year, 1988, was notable for a company celebration of the 50th anniversary of its foundation. The company also achieved annual sales figures of £711 million (an increase of 31% year on year) which contrasted very sharply with the £3,940 achieved in 1938.
The anniversary event was also celebrated in good style, at UniChem’s Convention, which for 1988 was being held at the Shangri La Hotel, in Bangkok, in October. The main subject for conversation at the business meetings seemed to be whether, and in what way, the company would be floated. The members were assured that there would be no chance of flotation without a full mandate from the membership.
UniChem brand of baby products received an update in its packaging and was joined in the OTC range by an “own-label” colour film, available in the most popular sizes.
The sales campaign for these lines featured another big increase in advertising spend.
In order to provide another method for pharmacists to work their way into ownership, alongside the Loans and Guarantees, a franchise scheme had been started. Under this scheme, the franchisee was set up to manage a fully-fitted shop and was allowed to keep profits over an agreed figure. This was to be followed by an agreed purchase arrangement.
Naturally, UniChem happenings over the course of the next two years were bound to be influenced, by the run-up to the proposed conversion to a PLC, which was due in 1990. However business still went on and one of the significant events in 1989 was to be the appointment of Lord Rippon as Chairman Designate, this was accompanied by the election of Michael Bardsley as a non-executive director.
In the day to day running of the company, most interest was centred on its first venture into the field of automated assembly of customers’ orders. This followed a full two-year programme of research carried out by the operations division. Every make and type of assembly machine which appeared to have the necessary capability had been surveyed. After some exhaustive testing, an A-frame design, offered by Knapp Ltd of Austria, was chosen.
The computer programmes which ran the machine were extensively rewritten to make them suitable for UniChem’s product inventory, and most of this work was done by the company’s own computer division.
Chessington was chosen as the site for the installation of the first machine, because of its geographical location, next-door to the company’s computer experts. The machine was programmed to handle the 800 most suitable dispensing products, and was able to pick up to 1200 orders per hour with the utmost accuracy. When at full speed, six products were picked per second. Over the course of the next two years similar machines were installed at each UniChem branch. This big step forward placed the company’s warehousing methods well ahead of the competition, although all of the major operators were moving in the same direction.
A major change to UniChem’s medical products inventory took place in 1989. After years spent defending its sales from the perceived threat posed from parallel-imported prescription products, the decision was taken to enter into this field. Rather than do this in an underhand, furtive fashion, the “bull was taken by the horns” and a joint operation set up with one of the principal parallel-importers, Stephar Ltd. Under this system the items were taken into the company’s regular medical product inventory, and included as part of the discount scheme. The system proved to be an instant success with the only small drawback being a degree of irregularity of supply, which was normal in this field, and which the customers were prepared to accept.
One of the other important developments in 1989, was the construction of a “purpose-built” 80,000 sq.ft. warehouse on a green-field site at Letchworth in Hertfordshire. Once it was complete the new branch replaced Willesden. The vast extra space was meant to handle the customer base of Walthamstow branch also. This plan worked out well, and Walthamstow branch was closed in 1990.
1989 was also the year in which the company began to take a real interest in Patient Medication Records (PMR). This was done, initially, by means of involving itself with the John Richardson (JRC) pharmacy computer system. This machine and its attendant software were felt to be the best available. Accordingly, a symposium for potential users and current users of the JRC system was held in November, and this was very well attended.
Although 1990 was to be over-shadowed by the proposed conversion to a PLC, other events need to be noted. The newly-built Letchworth branch opened, and was an instant success, under its first manager, Duncan Smeaton, who had transferred from Hinckley.
The highly successful UniChem own-label range had been repackaged, and once again the product range was to be extended. This time a number of hair styling products, luxury bath and shower products, both adults’ & children’s vitamins, and certain dental products, including toothpaste, were included. There were now over 350 lines, in the own-label range, and it was proving to be a real money-spinner.
Overall company sales turnover again reached an excellent level at £783 million, and it could be seen that, despite their strong interest in the forthcoming decision regarding the stock exchange, the executive team still had their eyes on the ball. However, the main focus was on flotation.