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24 Hour Pharmacy

DALLAS -- The addition of 24-hour pharmacy service at five Wal-Mart stores in Texas and Arkansas is the retailer's latest salvo in an offensive to improve its position on the convenience front.

The stores involved include one small-format supercenter and four Neighborhood Markets. One of the Neighborhood Markets is near Wal-Mart's Bentonville, Ark., headquarters, while three other locations are spread throughout the Dallas area in Mesquite, Arlington and Fort Worth, Texas. The supercenter involved in the test is a unit located in Plano, Texas, that measures just more than 100,000 square feet and features a drive-through pharmacy window and an exterior that resembles a Neighborhood Market. The Plano location is actually a forerunner of the 99,000-square-foot urban supercenter prototype Wal-Mart opened earlier this year in Tampa, Fla.

"We're going to concentrate on these five pharmacies and work to perfect our model," said Ron Chomiuk, Wal-Mart's vice president of pharmacy operations. "These facilities will allow us to gather feedback from our customers and our associates on what we're doing right and how we can further enhance this concept."

If the experiment proves successful, extending the expanded hours would be relatively simple, but potentially expensive, as pharmacists make an average annual salary of about $75,000. From an operations standpoint, virtually all of Wal-Mart s domestic supercenters and Neighborhood Markets contain pharmacies and already are open 24-hours. However, most Wal-Mart pharmacies are open from 9 a.m. to 9 p.m. Monday through Friday, 9 a.m. to 7 p.m. on Saturdays and 11 a.m. to 5 p.m. on Sundays. One exception is rural areas in which Wal-Mart operates some stores that open prior to 9 a.m.

The decision to experiment with extended pharmacy hours comes as the nation's largest chain drug store competitors continue to raise the convenience bar through aggressive expansion of their 24-hour locations. In fact, most of the new stores Walgreens opens are 24-hour locations. At the end of last month, 1,312 of Walgreens 4,479 stores operated on a 24-hour basis, compared with the 900 24-hour stores out of its 3,883 stores Walgreens operated at the end of its fiscal year Aug. 31, 2002.

A similar situation exists at CVS, where the company operated 800 24-hour or extended-hour stores at the end of 2002, but today reports approximately 1,700 of its 4,200 stores are either open 24 hours or offer extended hours with pharmacies that stay open until midnight. The figures for CVS are likely to surge during the next 18 months as the chain integrates its acquisition of 1,260 Eckerd drug stores, being as Eckerd only operated 45 24-hour locations. The majority of Eckerd stores CVS acquired are located in Texas and Florida, which also is where Wal-Mart has its highest concentration of supercenters.

As Wal-Mart s chain drug competitors grow larger and leverage their convenience, the giant discounter has sought other ways to improve the convenience of its large stores. Prior to the recent addition of the 24-hour pharmacies, Wal-Mart experimented with the addition of drive-through lanes at its supercenter pharmacies. It continues to do so, and a company spokesman said several prototypes are being tested.

Thus far, he said, customer response to the service has been positive. In addition, convenience was the root cause that led to the development of the Neighborhood Market concept. Introduced nearly six years ago, today there are approximately 70 of the small-format stores in operation, all of which feature drive-through pharmacies.

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