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INDEPENDENT COMMUNITY PHARMACY's TOTAL 1983 SALES REACH NEW HIGH

Executive Summary

INDEPENDENT COMMUNITY PHARMACY's TOTAL 1983 SALES REACH NEW HIGH of over $537,000, up almost 8% (more than $39,000) over 1982, the just-released preliminary Lilly Digest report reveals. This rate of increase for the average independent pharmacy is somewhat lower than the average annual growth of 9.7% observed by the Digest during the past decade. Rx sales advanced 13.5% over the previous year and significantly outpaced other sales, which grew just 1%. Rx sales in 1983 -- over $309,000 -- continued to grow faster than other sales and accounted for 57.6% of the average store's volume. Lilly's 1983 operating statistics of 860 independent community pharmacies indicate that the higher cost of goods (almost $359,000) was offset by lower total expenses (just over $163,000) resulting in a percentage net profit unchanged from the 2.9% of the previous year, Digest Editor Carl Deiner noted in the summarized report. The annual Lilly Digest will be completed and distributed in September, he said. Gross margin of almost $179,000 declined to 33.2% of sales -- down from 33.6% in 1982. This is the lowest gross margin level since 1953. Total expenses decreased to a new low of 30.3% of sales -- down from 30.7% in 1982. The combined effect of these changes was that net profit before taxes remained at 2.9% of sales. While declining as a percentage of sales, total expenses in dollars rose by over $10,000, or 6.7% from 1982. Also, the average proprietor's salary of $31,663 was higher in dollars (up about $1,700) but decreased as a percent of sales to just under 6%. Similarly, employees' wages rose in dollars but fell to 11% of total sales, the lowest level since 1956. Rent of just over $13,000 remained unchanged at 2.4% of sales, but was about $1,000, or 8.4% higher for the year. Miscellaneous operating costs of almost $60,000 rose over $5,000, an increase of 9.3%. However, these miscellaneous costs took the same share of sales dollars as the previous year: 11%.

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