Redcare Pharmacy Faces Mounting Pressure as Retail Giant Enters Online Medicine Market

Following a punishing year for its equity in 2025, which saw its share price nearly halved, the online pharmacy specialist Redcare Pharmacy is confronting fresh operational headwinds. As the new year begins, competitive pressure is intensifying, with German retail behemoth dm-drogerie markt launching a direct assault on Redcare's core business, forcing the company into a defensive battle for market share.

In response to the heightened competition, Redcare's management is pivoting its strategy. The company is placing increased strategic emphasis on prescription medications (Rx), a segment where its new rival is not active. This shift is underscored by third-quarter figures, which showed Rx revenue surging by over 42% to 272 million euros. The company is banking on this growth being robust enough to offset potential losses in the now more contested over-the-counter (OTC) segment.

The hope for future growth is also tied to the broader adoption of the digital "E-Rezept" (e-prescription) in Germany, which is expected to further catalyze the online Rx market. Concurrently, Redcare is bolstering its operational capabilities with the commissioning of a new logistics center and accelerated delivery times to southern Germany.

dm's Foray Poses Direct Threat

The competitive landscape tightened noticeably in mid-December. With the launch of its "dm-med" platform, dm-drogerie markt is aggressively pushing into the online medicine trade. The retail giant is now shipping approximately 2,500 non-prescription products directly to German customers from a logistics center in the Czech Republic.

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This move is particularly sensitive for Redcare, as the OTC business constitutes a central pillar of its earnings. Market observers view dm's immense brand recognition and vast customer base as a serious threat to established online pharmacies, setting the stage for a potential price war.

Financial House in Order Amid Share Price Weakness

On the capital front, Redcare has been streamlining its balance sheet. A final payment of 64.5 million euros is due on January 21, 2026, to settle the remaining portions of a convertible bond. This step marks the conclusion of a comprehensive liability restructuring that extended the majority of maturities out to the year 2032. Despite this upcoming outflow, the company's liquidity position remains solid, with recently reported reserves exceeding 265 million euros, providing necessary maneuvering room.

Nevertheless, uncertainty continues to weigh on the stock, which currently trades around 67 euros—a far cry from its 52-week high of over 138 euros.

All eyes are now on March 4, 2026, when Redcare will announce its full-year results and outlook for the current year. A key determinant for the share price's future trajectory will be whether the company can defend its recently narrow adjusted EBITDA margin of 2.4% in the face of this new competitive reality.