Redcare Pharmacy Faces Intensified Competition from New Market Entrant

The new year has brought an additional challenge for Redcare Pharmacy. Following a share price decline of approximately 50 percent last year, the company now confronts a heightened competitive landscape. German retail giant dm-drogerie markt is entering the pharmacy market with its own online offering, posing a direct threat.

For investors, the past twelve months proved to be a difficult period. Redcare shares concluded 2025 with a substantial loss of around 50 percent of their value. Trading closed with the stock near 65 euros, a level that approaches its multi-year low.

The market penalized the company despite rising revenues, focusing instead on its high marketing expenditures and the slower-than-anticipated monetization of its electronic prescription service. Confidence among many investors in Redcare's medium-term profitability targets has eroded.

dm Launches Digital Pharmacy Venture

At the turn of the year, the German drugstore chain dm-drogerie markt initiated its digital offensive. Through "dm-med," operated from a logistics center in the Czech Republic, the corporation is directly targeting the market for over-the-counter (OTC) medicines and pharmacy-exclusive cosmetics. This is a lucrative segment where Redcare Pharmacy has been a dominant player.

Should investors sell immediately? Or is it worth buying Redcare Pharmacy?

The entry of a financially robust competitor with high brand recognition and an extensive existing customer base is set to alter the competitive dynamics significantly. While Redcare remains strongly positioned in the prescription (Rx) segment through its electronic prescription platform, its OTC business now faces the risk of a price-driven battle for market share, which could squeeze profit margins.

Outlook: A More Pressurized Environment

The current share price, hovering in the 65 to 66 euro range, marks a critical zone. Market analysts express concern that Redcare may be forced to commit further resources to marketing campaigns to defend its position against dm. Such a move could potentially delay the company's path to sustained profitability.

A key factor will be whether growth in the prescription business, fueled by electronic prescriptions, can accelerate beyond expectations. This growth is needed to offset any potential losses in the OTC division. The company's liquidity position is stable following convertible bond activities last year. However, margin pressure remains a central challenge as Redcare heads into 2026.