Yes, they do—but not all their branches may offer this service. If there’s no suitable place nearby, consider the online option which is faster and cheaper.
If you do find a suitable location, we recommend you phone ahead and confirm that they take pictures for photo ID. To search for the phone number, use the official store locator.
Typically, a set of standard printed pictures will cost around $15 (but you can get photos for $4.95 using the online option).
If it’s exactly the physical service you need, remember that the price may vary across different stores. Again, you can access the official Chemist Warehouse store locator to contact the store and ask the staff how much you’ll have to pay for an Australian passport photo.