Learn Portuguese (Portugal): Onde fica o banco? — Fica ao lado da farmácia. - Where is the bank?

In Portuguese, we use the verb ficar (which normally means "to stay") to talk about the permanent location of buildings, places, or cities. Since a bank doesn't move, we say onde fica rather than onde está.

What does ao mean in the phrase ao lado?

ao is a combination of the preposition a (to/at) and the masculine word for "the", o. The phrase ao lado literally translates to "at the side", which is how Portuguese says "next to".

Why is it da farmácia and not just de farmácia?

The full phrase for "next to" is ao lado de. Because farmácia is a feminine noun, we include the feminine word for "the", which is a. When de (of/from) and a (the) meet, they combine into the single word da.

Could I leave out fica in the answer and just say Ao lado da farmácia?

Yes, you can! Repeating fica makes it a complete sentence, but dropping it is very common and completely natural in everyday spoken Portuguese.