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Pharmacy Schools In North Carolina

It isn't just "Releigh" or "Durham." Local boosters in North Carolina have gotten used to saying "Raleigh-Durham" when talking to outsiders--and they usually include nearby Chapel Hill in that mix.

As the points of the Research Triangle, all three cities and the universities they support exist in a close, symbiotic relationship to form a thriving and fast-growing population center. Together, they also comprise one of the nation's most hotly contested drug store arenas.

Raleigh-Durham also counts among its assets an intangible: its livability. The region was selected "Best in the South" in a recent survey by Money magazine and was ranked sixth among 354 metro areas in the "Places Rated Almanac" for its relatively low cost of living, schools and other factors.

The region also benefits from a highly educated population and a multitiered economic base that depends both on technological innovation and on stable sources of employment like government--Raleigh is the state's capital--and the military, which operates major bases in the region.

U.S. Census data show rapid growth for both Raleigh and Durham. Raleigh's population mushroomed 32.8 percent between 1990 and 2000 to 276,100. Durham experienced an even higher growth rate; its population zoomed 37 percent to 187,035 in 2000.

Chapel Hill, meanwhile, now comprises some 45,000 residents, as well as some 24,000 students attending the University of North Carolina. And suburban Cary--which locals joke stands for "Containment Area for Relocated Yankees"--saw its population explode from 7,640 in 1970 to more than 85,000 by 1998.

The trends have made the region irresistible for retailers. In turn, the Triangle has become a pharmacy battleground, with Eckerd, CVS and locally based Kerr Drug locked in a pitched tug-of-war for its 1.3 million customers.

A competitive shootout

With 44 stores within a 25-mile radius and more than 35 percent of Raleigh-Durham's total pharmacy sales, according to research firm Metro Market Studies, Eckerd stands at the top of the local pecking order. Mike Parrish, operations manager for Eckerd's eastern North Carolina region, says the chain maintains its edge with an aggressive store-renovation campaign, a flexible merchandising strategy and upgrades in such departments as cosmetics and consumables.

"I'm prejudiced, but I think our store standards and our merchandise presentations are superior," Parrish said. He estimated that 75 percent to 80 percent of the stores in the region have undergone renovation, including some relocations to stand-alone locations and the installation of such features as drive-through pharmacies and express photo one-hour labs.

Even its competitors praise the chain's performance here. Said one retail executive: "Eckerd's doing fine. They have a lot of stores here, and they've upgraded them."

CVS, which staked a major claim to the market's drug store business with its 1997 buyout of Revco DS, holds a slim lead over rival Kerr Drug for second place in Raleigh-Durham with some 30 stores, compared with 34 Kerr units. But Kerr is opening stores and fighting hard to win share with service and new innovations, including a cafe at its new prototype store in Wakeman, north of Raleigh.

"Service levels--keeping the right product on the shelves--is something we're focusing on," said Bill Baxley, senior vice president of merchandising and marketing for Kerr.

One strength for Kerr, added director of marketing Diane Eliezer, has been its ability to segment its stores by neighborhood. "That's important when you've got so many kinds of markets, like the urban Durham market; upscale, fast-growing suburbs with new money; and ... more rural areas."

Also claiming a share of the drug store business are a number of high-service independents.

That competitive balance has been largely intact for several years, but new pressures have emerged. The latest potential challenge comes from Walgreen Co., which now is scouting the Research Triangle and reportedly is eyeing several locations after a decades-long absence. Although Walgreens officials will confirm only that the chain is negotiating for sites, local retail sources say the chain soon will break ground for its first new store since leaving the region in the 1970s. Said one market observer, "It's not a secret that they're here."

The entry of Walgreens is sure to intensify competition. But the chain is only the latest in a long line of suitors vying for consumers in the Triangle.

"It's been a hotbed of retail activity," said Baxley. He compared the region to a "mini-Atlanta," with new department store entrants, such as Nordstroms and Kohl's, adding to the overall competition.

The market also has become a competitive shootout among discount and supermarket chains. Wal-Mart Stores now operates more than a dozen stores with pharmacies in the region and also has added two Sam's Club stores to the volatile mix. Close behind is Kroger Co., with nearly 20 stores in the market.

Kmart retains a presence, as well. However, the chain appears to be concentrating its efforts in densely populated or tourist areas, according to one retail observer.

Raleigh-Durham's booming population vortex also has drawn in another fast-growing club operator, BJ's Wholesale Club. The chain staged its third grand opening here in October in the Raleigh suburb of Garner.

Two other entrants have added to the thunder: Target Stores--which has opened stores in Cary and Garner with pharmacies, along with an older store in Raleigh--and Costco Wholesale.

Top players by store count

Retailer    1999  2002  2005 *

CVS          27    30    32
Eckerd       51    44    48
Kerr         32    34    36
Kroger       15    17    18
Phar Mar      3   N/A   N/A
Wal-Mart +  N/A    13    15

Source: Metro Market Studies and Drug Store News

* Estimates

+ Includes Neighborhood Market, Sam's Club, supercenters and discount
stores

RELATED ARTICLE: Eckerd carves niche with specialized pharmacy

DURHAM, N.C. -- Making the most of its proximity to Duke University's medical center and other nearby hospitals, Eckerd Corp. is adopting a more specialized clinical focus at one high-volume pharmacy in this "City of Medicine." The Eckerd store on Hillsborough Road here is becoming a destination for patients with conditions like HIV/AIDS and a referral center for local physicians.

"We have a lot of transitional patients here because we re only a mile or so from the medical center at Duke," said Michael Parrish, regional operations manager for Eckerd. Eckerd's local pharmacy managers have worked to make the pharmacy an outpatient resource for Duke and other health facilities.

"We're getting the word out to the local doctors, asking them what drugs we need to stock for their patients, and we'll make sure we have them here," said Brenden O'Hara, district pharmacy manager for Eckerd's Raleigh-Durham area drug stores. In addition, said O'Hara, "We have a pharmacist who's learning more about the HIV population, and we're working very closely with Libby Dobbs, a pharmacist in the infectious disease department at Duke."

The service is a win for everyone, he said. "We get some new patients, but the health care system also wins because that's less days patients have to stay in the hospital simply to make sure they can get their special medications."

The effort in specialized medicine and clinical care is one way Eckerd and its competitors are trying to distinguish themselves in a crowded market. Durham-based Kerr Drug continues its own groundbreaking clinical-care activities at the Kerr Care Center at its University Mall store in nearby Chapel Hill, N.C., and is in the midst of expanding its menu of services at the center, company officials said.

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