Meeting the competition head on has paid off for the family firm, writes Gabrielle Monaghan

The thought of getting involved in the family pharmacy business made Sharen McCabe break out into a sweat. So she studied law instead and later moved to Ghana to work as a commodities trader.

By the age of 26, McCabe was having a change of heart.

"I had the time of my life in Ghana," McCabe (35) says. "I learned a lot by making loads of mistakes. But I decided I needed a more structured environment."

After working with college friends for two years in Ghana, where she met American husband Jeff, she decided to return to London. With a postgraduate diploma in business management already under her belt from the London School of Economics, she joined Unilever as a trading manager.

At Unilever, McCabe dealt with retailers such as Asda, the chain owned by US supermarket giant Wal-Mart. She realised that the surge in consolidation among global retailers in the mid-1990s would eventually have an impact on her family's small business at home, especially as UK pharmacy chain Boots was about to enter the Irish market.

"I saw that Irish pharmacies would be part of large groups," she said. When Boots opened up in Ireland, "I said: 'let's not cower to this - we can stand up and fight'. I looked at what my parents were doing and started making a few trips back and forth between London and Dublin to have some conversations with them about the business."

At that time, McCabe's only had four pharmacies that focused mostly on filling prescriptions. A far cry from the 650sq m (7,000sq ft) McCabe's outlet that now stretches over two floors in the Dundrum Town Centre and sells more than 10,000 products.

"I looked at the family business and I wanted to professionalise it, bring in IT systems to make it easier to have an overview of the business, and started looking at key destination sites," McCabe said. In 1999, she became managing director of the company.

McCabe's Pharmacies began receiving takeover offers but she didn't want to see the business her parents had built up sold to the highest bidder. So, in 2003, with the help of bank loans, she acquired the company with her three sisters, two of whom are pharmacists.

After taking over the helm of the company, the eldest McCabe sibling went about opening more pharmacies and setting McCabe outlets apart from competitors such as Hickey's and Sam McCauley's. The company now has pharmacies in the Pavillions Shopping Centre in Swords, Crescent Shopping Centre in Limerick and Blanchardstown Shopping Centre. It is currently preparing to open its 17th store in Tallaght.

After opening the Dundrum store in March 2005, McCabe's set up its pilot Medical and Wellbeing Centre on the top floor of the outlet. It employs two GPs, a physiotherapist, a chiropractor, a family-planning service, and a skincare service.

Dispensing medicines now accounts for just half of McCabe's sales, with the remainder coming from babycare, vitamins, minerals, supplements and other products.

"We're looking to expand away from dispensing and trying to position ourselves in the healthy lifestyle market," she said. "In the Irish market, a lot of people are going down the route of cosmetics but that's a highly competitive market. Health is where the big growth is. Ireland has the lowest consumption of supplements per capita in Europe."

McCabe's introduced health screening in its stores earlier this month in an effort to attract more customers and help people detect conditions such as type 2 diabetes at an early stage. Three of the five health tests are free.

"Type 2 diabetes is growing in Ireland at an alarming rate, mainly because of the amount of sugar in our diets," McCabe said. "Men especially are reluctant to go to the doctor for tests. If we can get them to a friendly environment for tests, we can refer them to the doctor if necessary."

The stores also have weight-management clubs that give customers diet tips, free weigh-ins and blood-pressure tests weekly.

"About 400,000 people a day go to pharmacies, so they could get health screenings there," McCabe said. "In fact, since some nurses will be able to prescribe some medicines, I'd like to see pharmacists, who have trained for years, prescribe for certain minor ailments. This would help free up time spent in A&E.

"The health service is not using pharmacies as a resource as well as it could."

By focusing on healthcare and opening more pharmacies, McCabe has boosted sales fourfold to more than €42 million last year, up from just €10 million in 2000. She aims to increase sales 20 per cent this year and double sales within five years, mostly by opening more pharmacies.

McCabe's enthusiasm and ambition stems from growing up in a household where people weren't afraid to take risks. Roy and Margaret McCabe moved back to Ireland from Australia when Sharen was 10.

After studying pharmacy in Australia, Roy set up his first pharmacy in Malahide in 1981, before he and his wife even owned a house.

After selling his pharmacy business to his daughters, Roy used the proceeds to buy the 400-year-old Farnham Estate in Cavan, near where he grew up.

He's turning the site, complete with woodland and four lakes, into a hotel and wellness centre to be operated by Radisson SAS.

The hotel opens in May and a golf course will follow at a later stage.

"That's the way we were raised. My mother always said to me 'no one will pay your way.' There's nothing like having bought something to make it work."

While the company still has to fend off bids from predators time and again, McCabe is determined to keep the business private in the face of increasing competition from German group Celesio and Boots.

About 200 new pharmacies have opened in Ireland in the past two years, bringing the total to about 1,400, according to McCabe.

She doesn't rule out an initial public offering for the long term. "There is no need for us to go to the market now, but who knows what will happen in five or 10 years," she said.

One of the more immediate challenges McCabe faces is how the Government will reform Ireland's pharmacy industry. There is also criticism that pharmacy profit margins are too high.

"About 70 per cent of our prescriptions are in the Government scheme," McCabe said.

"Of that, 75 per cent are from medical cards. Contrary to popular opinion, there is a flat fee mark-up of only €2.95 on medical card prescriptions. The reason for the high proportion of medical card prescriptions is the introduction of free healthcare for the over-70s.

"On non-medical card prescriptions, there is a 33.3 per cent mark-up. Pharmacies get a lot of unfair attention but it's down to the pharmaceutical industry. The Irish Pharmaceutical and Health Association has an agreement with the Government that's due for renewal every five years and was due last summer. They set the prices and we have to take the prices."

In June the Government stepped back from a move to scrap rules preventing foreign-trained pharmacists from opening new pharmacies in Ireland. Separate legislation to abolish the rule is now understood to be planned after the much-delayed Pharmacy Bill is enacted. The Bill is intended to provide standards and rules for the pharmacy market.

"The supervising pharmacist has to be Irish-educated but it's well accepted that the rule is on the way out," McCabe says.

"It was set up that way because years ago Dutch and Spanish pharmacists were coming to Ireland but Irish pharmacists couldn't open outlets there.

"The EU is about free movement of goods and services so I don't think this rule will stand up much longer.

"We need that pharmacy bill to regulate how the industry is run," she said. "It's been in the works since about 1965. Right now, someone with a dubious background could run a pharmacy. The Pharmaceutical Society has guidelines but it needs to be given teeth."

Name: Sharen McCabe

Age: 35

Family: Married to Jeff

Career: Became managing director of McCabe's Pharmacies in 2003, after she acquired the company with her three sisters from her parents. Before joining the family business, McCabe worked in London with Unilever.

She started her career as a commodities trader in Ghana with a group of college friends

Education: Studied law at UCD and afterwards gained a postgraduate diploma in business management at the London School of Economics

Hobbies: Playing golf and painting in the summer in Vermont. Reads three or four non-fiction books a month

Why she is in the news: McCabe's opens its 17th pharmacy this month