99% of outlets break even in 6 months: Long Chau Pharmacy

“That is exactly what we were after,” Nguyen Bach Diep said at the annual general meeting of FPT Digital Retail Joint Stock Company, Long Chau’s parent company, on Friday.

“Of course, not all stores achieved that, but 99% of them have managed to do so.”

She revealed the chain’s breakeven point is higher than the usual VND400-450 million in the industry because Long Chau focuses on medicines, which contribute 60% of total revenues but have lower profit margins than dietary supplements, medical equipment, cosmetics, and FMCG that others sell.

In the first quarter it opened 100 new stores, mainly in districts and towns, and these have significantly shorter breakeven periods compared to city outlets because of lower rents and less competition, she said.

On Long Chau reaching the milestone of 1,000 outlets, she said: “This did not happen overnight, and it stemmed from very careful planning and preparations.”

Site selection, population density assessment, rent negotiation, pharmacist training, ensuring a diverse and competitive drug list were the factors to consider, she said.

She said the plan is to open at least 400 new stores this year. The rapid opening of stores, and well inside residential areas, could cause existing stores’ sales to suffer, but that would be “negligible” and soon offset by attracting new customers.

Long Chau targets revenues of VND14 trillion this year, a 46% increase from last year, despite the reduced demand expected due to belt-tightening because of the economic situation.

Profits are expected to double from last year’s VND52 billion.