Tennessee Board Of Pharmacy
Top 30 retail pharmacy chainsTop 30 retail pharmacy chains
2004 Rx
Company Headquarters sales * % change
1 Walgreens Deerfield, Ill. $23,700 17.6%
Marching steadily toward its goal of 7,000 stores by 2010, "the
pharmacy America trusts" continues to top the leaderboard,
dispensing some 443 prescriptions in 2004--roughly 14 percent of
the total retail pharmacy market. While the pharmacist strike in
its Illinois and Indiana stores didn't do its July comps any good,
it is unlikely to have any long-lasting effect. Curiously, at
press time, the only one of the top five that hadn't officially
announced an in-store health clinic initiative-though sources say
it is testing the concept quietly.
2 CVS Woonsocket, R.I. 21,500 17.5
Having converted nearly 1,100 former Eckerd stores to the look and
feel of the typical CVS/pharmacy, now comes the hard part: getting
those stores to perform like the typical CVS/pharmacy. Early signs
seem positive. Sales in the Florida stores are up 10 percent to 20
percent over pre-acquisition figures, and pharmacy wait times in
all of the stores are drastically improved: 90 percent of scripts
filled in 15 minutes or less versus 70 percent under Penney.
Pioneered in-store health clinics with CVS Health Connection stores
in 1997--now partnered with MinuteClinic to provide basic menu of
routine health screenings and services.
3 Rite Aid Camp Hill, Pa. 10,600 0.1
Looking to grow what has been a sluggish pharmacy business, the
chain has unveiled some important new initiatives, including Rite
Care, which pioneers the new frontier of Medication Therapy
Management services, and a new multilingual prescription label
program that prints labels in 11 languages. Its new Customer World
prototype features cleaner sight lines throughout to bring more
attention to the new-look pharmacy department. Partnered with Take
Care Health Systems for 10 in-store health clinics set to open in
November in Portland, Ore.
4 Wal-Mart Bentonville, Ark. ** 10,100 6.3
Also the No. 3 retail pharmacy provider in the country, the world's
largest retailer is showing a new interest in pharmacy convenience.
Wal-Mart has been experimenting quietly with drive-through pharmacy
in recent years and currently operates more than 133 drive-throughs,
including 85 in Neighborhood Markets. Although no official
announcement has been made, Wal-Mart apparently has partnered with
RediClinic to provide an array of services similar to MinuteClinic
in at least three stores: one in Arkansas and two in Oklahoma.
5 Albertsons ** Boise, Idaho 8,200 7.9 **
The top supermarket combo operator in America continues to expand
its dual-brand concept, which most recently returned the Osco name
to the New England market: Shaw's-Osco. In addition, the rollout of
the chain's Renaissance drug store format continues, with more than
100 stores remodeled since its 2003 introduction. The chain also
has partnered with Take Care to test six in-store health clinics in
the Kansas City market.
6 Brooks-Eckerd Warwick, R.I. 6,900 NA
Returning Eckerd's focus to the core drug store business has been
the charge since the acquisition. One major step: officially
rebranding the stores as Eckerd Pharmacy on the building and in the
circular. Another: remerchandising the stores. Kicked off major
ad campaign in April in key markets highlighting Eckerd's
100-year-plus tradition in pharmacy. While changing the fate of the
Eckerd stores is anything but a gimme, the chain's top executives,
who often compare themselves to the Super Bowl champion New England
Patriots, like their chances. The football comparison may not be
such a stretch-the Brooks team has a pretty good record working
acquisitions. After all, at one time Michel Coutu owned zero stores
in the United States. A few acquisitions later, he runs the No. 6
pharmacy retailer ... only in America!
7 Kroger Cincinnati 4,900 1.8
The nation's largest supermarket chain also has placed a newfound
emphasis on pharmacy convenience--its new-look Kroger Food & Drug
prototype puts a mini drug store in the front of the store,
certainly a trend among big-box pharmacy retailers. The new Kroger
Food & Drug creates a unified presence in pharmacy, health and
beauty aids and GM.
8 Safeway Pleasanton, Calif. 2,820 8.5
As Safeway improves the look of its stores, having remodeled
roughly 150 to its new, more upscale Lifestyle prototype and with
hundreds more planned for this year, its pharmacy business continues
to show healthy growth, right in line with overall industry trends.
Customer-friendly services grow, such as online refills delivered
with customers' groceries where its stores deliver. The company
operates pharmacies in more than 1,300 stores in the United States
and Canada. With longtime Longs pharmacy veteran Dave Fong in
charge of the chain's health care business, look for Safeway to
continue to challenge for a growing share of Rx sales.
9 Ahold USA Quincy, Mass. 2,400 -38.5
With roughly 700 of its stores operating a pharmacy department,
prescription drug sales play a large role for the chain, which has
struggled with its numbers in recent years as it has restructured.
According to Wilson Health Information, Ahold pharmacy customers
have the highest loyalty rate of any supermarket chain: 75 percent.
10 Sears/Kmart Hoffman Estates, Ill. 2,400 8.3
Private brands and off-mall real estate aside, perhaps the most
important asset Kmart brought to the table is the No. 10 pharmacy
operation in America, giving the new company a presence in health
care. Pharmacy is a key component of the new Sears Essentials
format, which "gives customers a complete, convenient shopping
solution," explained vice chairman and chief executive officer Alan
Lacy--all the better to compete with the likes of Wal-Mart and
Target. Early plans call for 25 Sears Essentials stores--former
Kmarts--to open in 12 states this year.
11 Longs Drug Walnut Creek, Calif. 2,170 3.4
Even if its top competitors continue to add stores all around it,
on a per-store basis, Longs generates higher sales and market share
than any other drug chain in America. The average Longs store
generates sales of $9.7 million per year. A heightened focus on
health--and a de-emphasis on GM-is evident in the assortment and in
the design of the Total Visual Appeal format it plans to have in
half its stores by 2008. Behind the scenes, the company is
wrapping up a $50 million upgrade in its supply chain, its DCs
and the stores.
12 Medicine Shoppe St. Louis 2,134 -1.8
With former Longs chief executive officer Terry Burnside at the
helm the company has ramped up its efforts to revitalize its network
of owner-operators--the company's numbers have suffered in recent
years as it has struggled to renew franchisee contracts. One-third
of its contracts expire in the next three years to five years. The
plan? More favorable royalty and licensing terms for new contracts,
a chance to renew existing contracts to the new terms and more
HQ-driven support, including buying programs, merchandising support,
etc.
13 Target Minneapolis 1,400 12.7
The typical Target pharmacy customer outspends the average Target
customer about 4-to-1. No wonder company executives are hellbent on
growing pharmacy and stealing customers--it has the potential to
drive the company's sales up exponentially. Initiatives such as
Clear Rx bring some color and a bit of the old Target cachet to
pharmacy, and the chain plans to add about 150 new pharmacy
locations in new and existing stores. Still, growing pharmacy is
not exactly the newest initiative for Target--Target's Rx volume
has grown 970 percent over the last 10 years; number of stores
with a pharmacy is up 710 percent.
14 Costco Issaquah, Wash. 927 12.5
Using the same formula for success in pharmacy as it has in the
rest of the store, Costco sells name brands at low prices,
surviving off razor-thin margins that rarely break single digits;
however, it manages to drive double-digit pharmacy sales gains
year after year. The pioneer of warehouse club pharmacy operates
pharmacy departments in 325 of its 333 U.S. stores--200 with
special pharmacy consulting rooms (read: MTMs-able). Costco
currently is rolling out a proprietary pharmacy system, including
automation and bar-code scanning, with a goal of increasing
productivity and cutting patient wait times.
15 Publix Lakeland, Fla. 919 9.0
Ranked two years in a row as the No. 1 supermarket pharmacy combo,
according to the Wilson Health Information customer satisfaction
survey. In its key Florida markets, an emphasis on customer
service--clearly a big hit with the seniors--keeps the chain among
the top three pharmacy retailers. "Our research shows they are
perceived as more helpful than employees at other companies,"
Wilson noted. Certainly, strong customer service comes easy when
you start with a highly motivated workforce; the company has been
voted eight times to Fortune magazine's annual list of the 100 Best
Companies To Work For.
16 HEB San Antonio $852 0.1%
The largest privately owned supermarket chain in America is not
only the leading food retailer in its key markets, it also is a
dominant pharmacy chain, giving Walgreens a serious run for its
money. HEB is the No. 2 pharmacy retailer in its hometown, with
27.6 percent of the local Rx market, and in Austin 23 percent Rx
share). Given the immigration rate in south Texas, both legal and
illegal, perhaps benefits from extra brand recognition in the
largely Latino markets it serves--operates 195 pharmacies in Texas,
21 in Mexico. The chain partnered with RediClinic in four stores.
17 Duane Reade New York 816 35.2
Owning most of New York City's best corners, it's no wonder the Big
Apple's homegrown drug chain continues to dominate the local
pharmacy market with more than 15 percent of share--it's got the
customer coming and going ... literally. In addition to saturating
the city's residential neighborhoods and bus Midtown and Downtown,
it operates a store--or two--in close proximity to every major
transit hub in the city. In addition to partnering with RediClinic,
also is looking to test vision care. The chain continues to try
innovative programs to create foot traffic including Chock full
o'Nuts cafes and DVD rental kiosks.
18 Winn-Dixie Jacksonville, Fla. 795 -18.3
Sore consolidation plans and market withdrawals--of the 326 stores
that Winn-Dixie recently announced it will sell or close, 233 are
in markets it is leaving entirely, including Atlanta, Augusta and
Savannah, Ga.; all stores in the Carolinas; Chattanooga, Tenn.; and
Jackson, Miss.--will continue to hammer the company's numbers as
its store count plummets. Even factoring out the store closings,
the chain has been hemorrhaging Rx market share in most of its
major markets, including its hometown of Jacksonville. And even
with the announced market defections, the chain still faces major
challenges in New Orleans, Miami and Orlando, Fla. Will focus on
retooling its merchandising strategy in its core markets. Still,
head-to-head with Publix, it won't be easy to win back pharmacy
customers.
19 Sam's Club Bentonville, Ark. 761 NA
Pharmacy has become a more important part of the mix for Sam's
Club in recent years--last year the company added 49 pharmacy
departments, outstripping the 13-unit net increase in total club
count. Given the sharp discounts the low-margin model provides,
pharmacy has become a growing draw for Sam's business customer-
members. Operates 407 pharmacies.
20 Giant Eagle Pittsburgh 723 1.7
No. 28 on Forbes' list of the top private companies in America,
Giant Eagle is a leading pharmacy player in its key markets in
western Pennsylvania--No. 2 in Rx market share in Pittsburgh behind
Brooks-Eckerd--southeastern Ohio, northern West Virginia and
western Maryland, operating 180 pharmacies, including 35 with
drive-throughs.
21 ShopKo Green Bay, Wis. 678 6.4
The only remaining regional discounter left in America has returned
to its roots in pharmacy--the chain was founded by pharmacist Jack
Ruben in 1962--and that's a smart move: Pharmacy and optical were
the most positive segments of its business and drove its comp sales
for most of 2004. The company in January opened the first three
Shopko Express stores, a 15,000-square-foot stand-alone drug store
format. Further expansion has been on hold as a bid to take the
company private is finalized--the chain's background in health care
makes it a most attractive acquisition target.
22 Fred's Memphis, Tenn. 470 11.6
Expanding pharmacy operations has been a major focus for the
Tennessee titan of mass retailing. In 2004, the company added 19
pharmacies, bringing the chainwide count to 258. With former Eckerd
senior vice president of pharmacy Jerry Thompson now on the board
of directors, expect the focus on pharmacy to continue.
23 Wegmans Rochester, N.Y. 409 1.5
Accepting more than 1,000 different insurance plans, there are very
few obstacles for customers to switch their pharmacy business to
Wegmans. Wegmans is the No. 1 pharmacy provider in its hometown of
Rochester and was voted No. 1 on the Fortune magazine list of the
100 Best Companies To Work For. The chain donated $5 million this
year to open the Robert B. Wegman School of Pharmacy at St. John
Fisher College.
24 Pathmark Woodbridge, N.J. 351 -1.7
Coming off a tough 2004, new minority owner Yucaipa Cos. plans to
invest $150 million to help change the company's fate. While the
company gave up on stand-alone drug stores several ears ago, harmac
remains an important part of the mix, operating in 130 of its 142
stores. Still a strong regional force--Path mark is the No. 2
supermarket operator in 7-out-of-9 metro markets in which it
competes.
25 Happy Harry's Newark, Del. 331 6.8
High employee retention--as much as one-third of the company's
2,700 employees have been with Happy Harry's for at least 10
years--combined with a rich history in its home state, keeps the
chain among the top pharmacy retailers in some tough markets. The
undisputed king of Delaware is up to 76 stores and should have
77 by year's end.
26 Kinney Drugs Gouverneur, N.Y. 329 16.6
No chain north of Syracuse, N.Y., can keep up with this regional
pharmacy powerhouse. In Ogdensburg-Massena, smack-dab in the middle
of Kinney Country, the chain controls more than half of the local
pharmacy market. And as Kinney expands southward, it is becoming a
bigger player in bigger markets--No. 3 in Syracuse with a 12
percent share of the pharmacy market.
27 Meijer Grand Rapids, Mich. 328 1.5
With CVS' former top merchant Larry Zigerelli at the helm, expect
the emphasis on pharmacy to continue--"Health and beauty is a strong
business for us," Zigerelli noted. A decision to move pharmacy to
the back of the store several years ago led to declining sales ...
not to mention the decision more recently to put pharmacy and HBC
back in the front of all its new stores to offer those customers
more convenience.
28 Hy-Vee West Des Moines, Iowa 322 9.5
Celebrating its 75th anniversary, Hy-Vee opened its first drug
store in Cedar Rapids, Iowa, in 1969 and operates 199 pharmacies
today. The drug store business remains a major focus for the chain,
which recently changed the banner on 26 stand-alone drug stores
from Drug Town to Hy-Vee Drugstores. In the works is a new Hy-Vee
Drugstore prototype, which includes a new baby department.
29 USA/Super D Pine Bluff, Ark. 320 NA
([dagger][dagger][dagger])
The acquisition of May's Drug Stores was a shot in the arm for the
company in a couple of ways. No. 1, May's, with a higher percentage
of pharmacy sales, generated much higher volume than pre-acquisition
USA/Super D, roughly $4.7 million per store compared with $3.5
million. No. 2, the merger brought Bob Berman, a savvy merchant,
into the USA fold. Together with the 22 Med-X stores it acquired
within weeks of the May's deal, USA/Super D extended its reach into
Oklahoma, becoming a much larger presence in the mid-South--not to
mention a larger presence in retail pharmacy.
30 Kerr Drug, Durham, N.C. 300 -18.6
Another pioneer of disease state management (the old term for MTMs),
the company this month will open its first store dedicated solely
to patient care--the 9,000-square-foot store in Lenoir, N.C., will
feature not only a fully staffed pharmacy and pharmacy care center,
but also private offices for one-on-one patient consultations and
health screenings and in-depth disease state management. The new
store picks up where the Kerr Health Care Center--which debuted two
years ago in Raleigh and now exists in 13 of its 105 stores--left
off with an emphasis on clinical care and products and services to
help chronic care patients live more comfortably.
2004 total % of sales
Company corp. sales * % change from Rx
1 Walgreens $37,500 15.4% 63.2%
Marching steadily toward its goal of 7,000 stores by 2010, "the
pharmacy America trusts" continues to top the leaderboard,
dispensing some 443 prescriptions in 2004--roughly 14 percent of
the total retail pharmacy market. While the pharmacist strike in
its Illinois and Indiana stores didn't do its July comps any good,
it is unlikely to have any long-lasting effect. Curiously, at
press time, the only one of the top five that hadn't officially
announced an in-store health clinic initiative-though sources say
it is testing the concept quietly.
2 CVS 30,600 15.1 70.5
Having converted nearly 1,100 former Eckerd stores to the look and
feel of the typical CVS/pharmacy, now comes the hard part: getting
those stores to perform like the typical CVS/pharmacy. Early signs
seem positive. Sales in the Florida stores are up 10 percent to 20
percent over pre-acquisition figures, and pharmacy wait times in
all of the stores are drastically improved: 90 percent of scripts
filled in 15 minutes or less versus 70 percent under Penney.
Pioneered in-store health clinics with CVS Health Connection stores
in 1997--now partnered with MinuteClinic to provide basic menu of
routine health screenings and services.
3 Rite Aid 16,800 1.3 63.6
Looking to grow what has been a sluggish pharmacy business, the
chain has unveiled some important new initiatives, including Rite
Care, which pioneers the new frontier of Medication Therapy
Management services, and a new multilingual prescription label
program that prints labels in 11 languages. Its new Customer World
prototype features cleaner sight lines throughout to bring more
attention to the new-look pharmacy department. Partnered with Take
Care Health Systems for 10 in-store health clinics set to open in
November in Portland, Ore.
4 Wal-Mart 191,800 10.1 6.3
Also the No. 3 retail pharmacy provider in the country, the world's
largest retailer is showing a new interest in pharmacy convenience.
Wal-Mart has been experimenting quietly with drive-through pharmacy
in recent years and currently operates more than 133 drive-throughs,
including 85 in Neighborhood Markets. Although no official
announcement has been made, Wal-Mart apparently has partnered with
RediClinic to provide an array of services similar to MinuteClinic
in at least three stores: one in Arkansas and two in Oklahoma.
5 Albertsons ** 39,800 14.0 20.6
The top supermarket combo operator in America continues to expand
its dual-brand concept, which most recently returned the Osco name
to the New England market: Shaw's-Osco. In addition, the rollout of
the chain's Renaissance drug store format continues, with more than
100 stores remodeled since its 2003 introduction. The chain also
has partnered with Take Care to test six in-store health clinics in
the Kansas City market.
6 Brooks-Eckerd 9,800 4.1 NA
Returning Eckerd's focus to the core drug store business has been
the charge since the acquisition. One major step: officially
rebranding the stores as Eckerd Pharmacy on the building and in the
circular. Another: remerchandising the stores. Kicked off major
ad campaign in April in key markets highlighting Eckerd's
100-year-plus tradition in pharmacy. While changing the fate of the
Eckerd stores is anything but a gimme, the chain's top executives,
who often compare themselves to the Super Bowl champion New England
Patriots, like their chances. The football comparison may not be
such a stretch-the Brooks team has a pretty good record working
acquisitions. After all, at one time Michel Coutu owned zero stores
in the United States. A few acquisitions later, he runs the No. 6
pharmacy retailer ... only in America!
7 Kroger 56,430 4.9 8.7
The nation's largest supermarket chain also has placed a newfound
emphasis on pharmacy convenience--its new-look Kroger Food & Drug
prototype puts a mini drug store in the front of the store,
certainly a trend among big-box pharmacy retailers. The new Kroger
Food & Drug creates a unified presence in pharmacy, health and
beauty aids and GM.
8 Safeway 35,800 1.0 7.9
As Safeway improves the look of its stores, having remodeled
roughly 150 to its new, more upscale Lifestyle prototype and with
hundreds more planned for this year, its pharmacy business continues
to show healthy growth, right in line with overall industry trends.
Customer-friendly services grow, such as online refills delivered
with customers' groceries where its stores deliver. The company
operates pharmacies in more than 1,300 stores in the United States
and Canada. With longtime Longs pharmacy veteran Dave Fong in
charge of the chain's health care business, look for Safeway to
continue to challenge for a growing share of Rx sales.
9 Ahold USA 27,400 1.7 8.8
With roughly 700 of its stores operating a pharmacy department,
prescription drug sales play a large role for the chain, which has
struggled with its numbers in recent years as it has restructured.
According to Wilson Health Information, Ahold pharmacy customers
have the highest loyalty rate of any supermarket chain: 75 percent.
10 Sears/Kmart 55,000 NA 4.7
Private brands and off-mall real estate aside, perhaps the most
important asset Kmart brought to the table is the No. 10 pharmacy
operation in America, giving the new company a presence in health
care. Pharmacy is a key component of the new Sears Essentials
format, which "gives customers a complete, convenient shopping
solution," explained vice chairman and chief executive officer Alan
Lacy--all the better to compete with the likes of Wal-Mart and
Target. Early plans call for 25 Sears Essentials stores--former
Kmarts--to open in 12 states this year.
11 Longs Drug 4,610 1.8 47.4
Even if its top competitors continue to add stores all around it,
on a per-store basis, Longs generates higher sales and market share
than any other drug chain in America. The average Longs store
generates sales of $9.7 million per year. A heightened focus on
health--and a de-emphasis on GM-is evident in the assortment and in
the design of the Total Visual Appeal format it plans to have in
half its stores by 2008. Behind the scenes, the company is
wrapping up a $50 million upgrade in its supply chain, its DCs
and the stores.
12 Medicine Shoppe 2,200 97 1,066
With former Longs chief executive officer Terry Burnside at the
helm the company has ramped up its efforts to revitalize its network
of owner-operators--the company's numbers have suffered in recent
years as it has struggled to renew franchisee contracts. One-third
of its contracts expire in the next three years to five years. The
plan? More favorable royalty and licensing terms for new contracts,
a chance to renew existing contracts to the new terms and more
HQ-driven support, including buying programs, merchandising support,
etc.
13 Target 46,839 11.6 2.9
The typical Target pharmacy customer outspends the average Target
customer about 4-to-1. No wonder company executives are hellbent on
growing pharmacy and stealing customers--it has the potential to
drive the company's sales up exponentially. Initiatives such as
Clear Rx bring some color and a bit of the old Target cachet to
pharmacy, and the chain plans to add about 150 new pharmacy
locations in new and existing stores. Still, growing pharmacy is
not exactly the newest initiative for Target--Target's Rx volume
has grown 970 percent over the last 10 years; number of stores
with a pharmacy is up 710 percent.
14 Costco 48,107 11.0 1.9
Using the same formula for success in pharmacy as it has in the
rest of the store, Costco sells name brands at low prices,
surviving off razor-thin margins that rarely break single digits;
however, it manages to drive double-digit pharmacy sales gains
year after year. The pioneer of warehouse club pharmacy operates
pharmacy departments in 325 of its 333 U.S. stores--200 with
special pharmacy consulting rooms (read: MTMs-able). Costco
currently is rolling out a proprietary pharmacy system, including
automation and bar-code scanning, with a goal of increasing
productivity and cutting patient wait times.
15 Publix 18,600 10.7 4.9
Ranked two years in a row as the No. 1 supermarket pharmacy combo,
according to the Wilson Health Information customer satisfaction
survey. In its key Florida markets, an emphasis on customer
service--clearly a big hit with the seniors--keeps the chain among
the top three pharmacy retailers. "Our research shows they are
perceived as more helpful than employees at other companies,"
Wilson noted. Certainly, strong customer service comes easy when
you start with a highly motivated workforce; the company has been
voted eight times to Fortune magazine's annual list of the 100 Best
Companies To Work For.
16 HEB $11,400 3.5% 7.5%
The largest privately owned supermarket chain in America is not
only the leading food retailer in its key markets, it also is a
dominant pharmacy chain, giving Walgreens a serious run for its
money. HEB is the No. 2 pharmacy retailer in its hometown, with
27.6 percent of the local Rx market, and in Austin 23 percent Rx
share). Given the immigration rate in south Texas, both legal and
illegal, perhaps benefits from extra brand recognition in the
largely Latino markets it serves--operates 195 pharmacies in Texas,
21 in Mexico. The chain partnered with RediClinic in four stores.
17 Duane Reade 1,600 9.1 51.0
Owning most of New York City's best corners, it's no wonder the Big
Apple's homegrown drug chain continues to dominate the local
pharmacy market with more than 15 percent of share--it's got the
customer coming and going ... literally. In addition to saturating
the city's residential neighborhoods and bus Midtown and Downtown,
it operates a store--or two--in close proximity to every major
transit hub in the city. In addition to partnering with RediClinic,
also is looking to test vision care. The chain continues to try
innovative programs to create foot traffic including Chock full
o'Nuts cafes and DVD rental kiosks.
18 Winn-Dixie 10,630 -3.9 7.5
Sore consolidation plans and market withdrawals--of the 326 stores
that Winn-Dixie recently announced it will sell or close, 233 are
in markets it is leaving entirely, including Atlanta, Augusta and
Savannah, Ga.; all stores in the Carolinas; Chattanooga, Tenn.; and
Jackson, Miss.--will continue to hammer the company's numbers as
its store count plummets. Even factoring out the store closings,
the chain has been hemorrhaging Rx market share in most of its
major markets, including its hometown of Jacksonville. And even
with the announced market defections, the chain still faces major
challenges in New Orleans, Miami and Orlando, Fla. Will focus on
retooling its merchandising strategy in its core markets. Still,
head-to-head with Publix, it won't be easy to win back pharmacy
customers.
19 Sam's Club 37,119 7.5 2.1
Pharmacy has become a more important part of the mix for Sam's
Club in recent years--last year the company added 49 pharmacy
departments, outstripping the 13-unit net increase in total club
count. Given the sharp discounts the low-margin model provides,
pharmacy has become a growing draw for Sam's business customer-
members. Operates 407 pharmacies.
20 Giant Eagle 5,200 10.6 13.9
No. 28 on Forbes' list of the top private companies in America,
Giant Eagle is a leading pharmacy player in its key markets in
western Pennsylvania--No. 2 in Rx market share in Pittsburgh behind
Brooks-Eckerd--southeastern Ohio, northern West Virginia and
western Maryland, operating 180 pharmacies, including 35 with
drive-throughs.
21 ShopKo 3,200 -0.5 21.4
The only remaining regional discounter left in America has returned
to its roots in pharmacy--the chain was founded by pharmacist Jack
Ruben in 1962--and that's a smart move: Pharmacy and optical were
the most positive segments of its business and drove its comp sales
for most of 2004. The company in January opened the first three
Shopko Express stores, a 15,000-square-foot stand-alone drug store
format. Further expansion has been on hold as a bid to take the
company private is finalized--the chain's background in health care
makes it a most attractive acquisition target.
22 Fred's 1,442 11.0 32.6
Expanding pharmacy operations has been a major focus for the
Tennessee titan of mass retailing. In 2004, the company added 19
pharmacies, bringing the chainwide count to 258. With former Eckerd
senior vice president of pharmacy Jerry Thompson now on the board
of directors, expect the focus on pharmacy to continue.
23 Wegmans 3,600 9.3 11.4
Accepting more than 1,000 different insurance plans, there are very
few obstacles for customers to switch their pharmacy business to
Wegmans. Wegmans is the No. 1 pharmacy provider in its hometown of
Rochester and was voted No. 1 on the Fortune magazine list of the
100 Best Companies To Work For. The chain donated $5 million this
year to open the Robert B. Wegman School of Pharmacy at St. John
Fisher College.
24 Pathmark 3,980 -0.3 8.8
Coming off a tough 2004, new minority owner Yucaipa Cos. plans to
invest $150 million to help change the company's fate. While the
company gave up on stand-alone drug stores several ears ago, harmac
remains an important part of the mix, operating in 130 of its 142
stores. Still a strong regional force--Path mark is the No. 2
supermarket operator in 7-out-of-9 metro markets in which it
competes.
25 Happy Harry's 455 6.9 73.0
High employee retention--as much as one-third of the company's
2,700 employees have been with Happy Harry's for at least 10
years--combined with a rich history in its home state, keeps the
chain among the top pharmacy retailers in some tough markets. The
undisputed king of Delaware is up to 76 stores and should have
77 by year's end.
26 Kinney Drugs 457 17.0 72.0
No chain north of Syracuse, N.Y., can keep up with this regional
pharmacy powerhouse. In Ogdensburg-Massena, smack-dab in the middle
of Kinney Country, the chain controls more than half of the local
pharmacy market. And as Kinney expands southward, it is becoming a
bigger player in bigger markets--No. 3 in Syracuse with a 12
percent share of the pharmacy market.
27 Meijer 13,100 2.0 3.0
With CVS' former top merchant Larry Zigerelli at the helm, expect
the emphasis on pharmacy to continue--"Health and beauty is a strong
business for us," Zigerelli noted. A decision to move pharmacy to
the back of the store several years ago led to declining sales ...
not to mention the decision more recently to put pharmacy and HBC
back in the front of all its new stores to offer those customers
more convenience.
28 Hy-Vee 4,600 9.5 7.0
Celebrating its 75th anniversary, Hy-Vee opened its first drug
store in Cedar Rapids, Iowa, in 1969 and operates 199 pharmacies
today. The drug store business remains a major focus for the chain,
which recently changed the banner on 26 stand-alone drug stores
from Drug Town to Hy-Vee Drugstores. In the works is a new Hy-Vee
Drugstore prototype, which includes a new baby department.
29 USA/Super D 525 48.0 61.0
The acquisition of May's Drug Stores was a shot in the arm for the
company in a couple of ways. No. 1, May's, with a higher percentage
of pharmacy sales, generated much higher volume than pre-acquisition
USA/Super D, roughly $4.7 million per store compared with $3.5
million. No. 2, the merger brought Bob Berman, a savvy merchant,
into the USA fold. Together with the 22 Med-X stores it acquired
within weeks of the May's deal, USA/Super D extended its reach into
Oklahoma, becoming a much larger presence in the mid-South--not to
mention a larger presence in retail pharmacy.
30 Kerr Drug, 450 -5.5 65.0
Another pioneer of disease state management (the old term for MTMs),
the company this month will open its first store dedicated solely
to patient care--the 9,000-square-foot store in Lenoir, N.C., will
feature not only a fully staffed pharmacy and pharmacy care center,
but also private offices for one-on-one patient consultations and
health screenings and in-depth disease state management. The new
store picks up where the Kerr Health Care Center--which debuted two
years ago in Raleigh and now exists in 13 of its 105 stores--left
off with an emphasis on clinical care and products and services to
help chronic care patients live more comfortably.
Total No. of stores
Company store w/Rx
1 Walgreens 4,582 4,582
Marching steadily toward its goal of 7,000 stores by 2010, "the
pharmacy America trusts" continues to top the leaderboard,
dispensing some 443 prescriptions in 2004--roughly 14 percent of
the total retail pharmacy market. While the pharmacist strike in
its Illinois and Indiana stores didn't do its July comps any good,
it is unlikely to have any long-lasting effect. Curiously, at
press time, the only one of the top five that hadn't officially
announced an in-store health clinic initiative-though sources say
it is testing the concept quietly.
2 CVS 5,375 5,268
Having converted nearly 1,100 former Eckerd stores to the look and
feel of the typical CVS/pharmacy, now comes the hard part: getting
those stores to perform like the typical CVS/pharmacy. Early signs
seem positive. Sales in the Florida stores are up 10 percent to 20
percent over pre-acquisition figures, and pharmacy wait times in
all of the stores are drastically improved: 90 percent of scripts
filled in 15 minutes or less versus 70 percent under Penney.
Pioneered in-store health clinics with CVS Health Connection stores
in 1997--now partnered with MinuteClinic to provide basic menu of
routine health screenings and services.
3 Rite Aid 3,356 3,356
Looking to grow what has been a sluggish pharmacy business, the
chain has unveiled some important new initiatives, including Rite
Care, which pioneers the new frontier of Medication Therapy
Management services, and a new multilingual prescription label
program that prints labels in 11 languages. Its new Customer World
prototype features cleaner sight lines throughout to bring more
attention to the new-look pharmacy department. Partnered with Take
Care Health Systems for 10 in-store health clinics set to open in
November in Portland, Ore.
4 Wal-Mart 3,151 2,993
Also the No. 3 retail pharmacy provider in the country, the world's
largest retailer is showing a new interest in pharmacy convenience.
Wal-Mart has been experimenting quietly with drive-through pharmacy
in recent years and currently operates more than 133 drive-throughs,
including 85 in Neighborhood Markets. Although no official
announcement has been made, Wal-Mart apparently has partnered with
RediClinic to provide an array of services similar to MinuteClinic
in at least three stores: one in Arkansas and two in Oklahoma.
5 Albertsons ** 2,510 2,183
The top supermarket combo operator in America continues to expand
its dual-brand concept, which most recently returned the Osco name
to the New England market: Shaw's-Osco. In addition, the rollout of
the chain's Renaissance drug store format continues, with more than
100 stores remodeled since its 2003 introduction. The chain also
has partnered with Take Care to test six in-store health clinics in
the Kansas City market.
6 Brooks-Eckerd 1,910 1,910
Returning Eckerd's focus to the core drug store business has been
the charge since the acquisition. One major step: officially
rebranding the stores as Eckerd Pharmacy on the building and in the
circular. Another: remerchandising the stores. Kicked off major
ad campaign in April in key markets highlighting Eckerd's
100-year-plus tradition in pharmacy. While changing the fate of the
Eckerd stores is anything but a gimme, the chain's top executives,
who often compare themselves to the Super Bowl champion New England
Patriots, like their chances. The football comparison may not be
such a stretch-the Brooks team has a pretty good record working
acquisitions. After all, at one time Michel Coutu owned zero stores
in the United States. A few acquisitions later, he runs the No. 6
pharmacy retailer ... only in America!
7 Kroger 2,532 1,443
The nation's largest supermarket chain also has placed a newfound
emphasis on pharmacy convenience--its new-look Kroger Food & Drug
prototype puts a mini drug store in the front of the store,
certainly a trend among big-box pharmacy retailers. The new Kroger
Food & Drug creates a unified presence in pharmacy, health and
beauty aids and GM.
8 Safeway 1,802 1,333
As Safeway improves the look of its stores, having remodeled
roughly 150 to its new, more upscale Lifestyle prototype and with
hundreds more planned for this year, its pharmacy business continues
to show healthy growth, right in line with overall industry trends.
Customer-friendly services grow, such as online refills delivered
with customers' groceries where its stores deliver. The company
operates pharmacies in more than 1,300 stores in the United States
and Canada. With longtime Longs pharmacy veteran Dave Fong in
charge of the chain's health care business, look for Safeway to
continue to challenge for a growing share of Rx sales.
9 Ahold USA 1,046 837
With roughly 700 of its stores operating a pharmacy department,
prescription drug sales play a large role for the chain, which has
struggled with its numbers in recent years as it has restructured.
According to Wilson Health Information, Ahold pharmacy customers
have the highest loyalty rate of any supermarket chain: 75 percent.
10 Sears/Kmart 3,800 1,140
Private brands and off-mall real estate aside, perhaps the most
important asset Kmart brought to the table is the No. 10 pharmacy
operation in America, giving the new company a presence in health
care. Pharmacy is a key component of the new Sears Essentials
format, which "gives customers a complete, convenient shopping
solution," explained vice chairman and chief executive officer Alan
Lacy--all the better to compete with the likes of Wal-Mart and
Target. Early plans call for 25 Sears Essentials stores--former
Kmarts--to open in 12 states this year.
11 Longs Drug 472 472
Even if its top competitors continue to add stores all around it,
on a per-store basis, Longs generates higher sales and market share
than any other drug chain in America. The average Longs store
generates sales of $9.7 million per year. A heightened focus on
health--and a de-emphasis on GM-is evident in the assortment and in
the design of the Total Visual Appeal format it plans to have in
half its stores by 2008. Behind the scenes, the company is
wrapping up a $50 million upgrade in its supply chain, its DCs
and the stores.
12 Medicine Shoppe 1,066
With former Longs chief executive officer Terry Burnside at the
helm the company has ramped up its efforts to revitalize its network
of owner-operators--the company's numbers have suffered in recent
years as it has struggled to renew franchisee contracts. One-third
of its contracts expire in the next three years to five years. The
plan? More favorable royalty and licensing terms for new contracts,
a chance to renew existing contracts to the new terms and more
HQ-driven support, including buying programs, merchandising support,
etc.
13 Target 1,306 993
The typical Target pharmacy customer outspends the average Target
customer about 4-to-1. No wonder company executives are hellbent on
growing pharmacy and stealing customers--it has the potential to
drive the company's sales up exponentially. Initiatives such as
Clear Rx bring some color and a bit of the old Target cachet to
pharmacy, and the chain plans to add about 150 new pharmacy
locations in new and existing stores. Still, growing pharmacy is
not exactly the newest initiative for Target--Target's Rx volume
has grown 970 percent over the last 10 years; number of stores
with a pharmacy is up 710 percent.
14 Costco 333 ([dagger]) 323
Using the same formula for success in pharmacy as it has in the
rest of the store, Costco sells name brands at low prices,
surviving off razor-thin margins that rarely break single digits;
however, it manages to drive double-digit pharmacy sales gains
year after year. The pioneer of warehouse club pharmacy operates
pharmacy departments in 325 of its 333 U.S. stores--200 with
special pharmacy consulting rooms (read: MTMs-able). Costco
currently is rolling out a proprietary pharmacy system, including
automation and bar-code scanning, with a goal of increasing
productivity and cutting patient wait times.
15 Publix 851 613
Ranked two years in a row as the No. 1 supermarket pharmacy combo,
according to the Wilson Health Information customer satisfaction
survey. In its key Florida markets, an emphasis on customer
service--clearly a big hit with the seniors--keeps the chain among
the top three pharmacy retailers. "Our research shows they are
perceived as more helpful than employees at other companies,"
Wilson noted. Certainly, strong customer service comes easy when
you start with a highly motivated workforce; the company has been
voted eight times to Fortune magazine's annual list of the 100 Best
Companies To Work For.
16 HEB 304 188
The largest privately owned supermarket chain in America is not
only the leading food retailer in its key markets, it also is a
dominant pharmacy chain, giving Walgreens a serious run for its
money. HEB is the No. 2 pharmacy retailer in its hometown, with
27.6 percent of the local Rx market, and in Austin 23 percent Rx
share). Given the immigration rate in south Texas, both legal and
illegal, perhaps benefits from extra brand recognition in the
largely Latino markets it serves--operates 195 pharmacies in Texas,
21 in Mexico. The chain partnered with RediClinic in four stores.
17 Duane Reade 255 255
Owning most of New York City's best corners, it's no wonder the Big
Apple's homegrown drug chain continues to dominate the local
pharmacy market with more than 15 percent of share--it's got the
customer coming and going ... literally. In addition to saturating
the city's residential neighborhoods and bus Midtown and Downtown,
it operates a store--or two--in close proximity to every major
transit hub in the city. In addition to partnering with RediClinic,
also is looking to test vision care. The chain continues to try
innovative programs to create foot traffic including Chock full
o'Nuts cafes and DVD rental kiosks.
18 Winn-Dixie 920 653
Sore consolidation plans and market withdrawals--of the 326 stores
that Winn-Dixie recently announced it will sell or close, 233 are
in markets it is leaving entirely, including Atlanta, Augusta and
Savannah, Ga.; all stores in the Carolinas; Chattanooga, Tenn.; and
Jackson, Miss.--will continue to hammer the company's numbers as
its store count plummets. Even factoring out the store closings,
the chain has been hemorrhaging Rx market share in most of its
major markets, including its hometown of Jacksonville. And even
with the announced market defections, the chain still faces major
challenges in New Orleans, Miami and Orlando, Fla. Will focus on
retooling its merchandising strategy in its core markets. Still,
head-to-head with Publix, it won't be easy to win back pharmacy
customers.
19 Sam's Club 551 408
Pharmacy has become a more important part of the mix for Sam's
Club in recent years--last year the company added 49 pharmacy
departments, outstripping the 13-unit net increase in total club
count. Given the sharp discounts the low-margin model provides,
pharmacy has become a growing draw for Sam's business customer-
members. Operates 407 pharmacies.
20 Giant Eagle 219 201
No. 28 on Forbes' list of the top private companies in America,
Giant Eagle is a leading pharmacy player in its key markets in
western Pennsylvania--No. 2 in Rx market share in Pittsburgh behind
Brooks-Eckerd--southeastern Ohio, northern West Virginia and
western Maryland, operating 180 pharmacies, including 35 with
drive-throughs.
21 ShopKo 360 255
The only remaining regional discounter left in America has returned
to its roots in pharmacy--the chain was founded by pharmacist Jack
Ruben in 1962--and that's a smart move: Pharmacy and optical were
the most positive segments of its business and drove its comp sales
for most of 2004. The company in January opened the first three
Shopko Express stores, a 15,000-square-foot stand-alone drug store
format. Further expansion has been on hold as a bid to take the
company private is finalized--the chain's background in health care
makes it a most attractive acquisition target.
22 Fred's 563 258
Expanding pharmacy operations has been a major focus for the
Tennessee titan of mass retailing. In 2004, the company added 19
pharmacies, bringing the chainwide count to 258. With former Eckerd
senior vice president of pharmacy Jerry Thompson now on the board
of directors, expect the focus on pharmacy to continue.
23 Wegmans 68 68
Accepting more than 1,000 different insurance plans, there are very
few obstacles for customers to switch their pharmacy business to
Wegmans. Wegmans is the No. 1 pharmacy provider in its hometown of
Rochester and was voted No. 1 on the Fortune magazine list of the
100 Best Companies To Work For. The chain donated $5 million this
year to open the Robert B. Wegman School of Pharmacy at St. John
Fisher College.
24 Pathmark 142 131
Coming off a tough 2004, new minority owner Yucaipa Cos. plans to
invest $150 million to help change the company's fate. While the
company gave up on stand-alone drug stores several ears ago, harmac
remains an important part of the mix, operating in 130 of its 142
stores. Still a strong regional force--Path mark is the No. 2
supermarket operator in 7-out-of-9 metro markets in which it
competes.
25 Happy Harry's 75 75
High employee retention--as much as one-third of the company's
2,700 employees have been with Happy Harry's for at least 10
years--combined with a rich history in its home state, keeps the
chain among the top pharmacy retailers in some tough markets. The
undisputed king of Delaware is up to 76 stores and should have
77 by year's end.
26 Kinney Drugs 71 71
No chain north of Syracuse, N.Y., can keep up with this regional
pharmacy powerhouse. In Ogdensburg-Massena, smack-dab in the middle
of Kinney Country, the chain controls more than half of the local
pharmacy market. And as Kinney expands southward, it is becoming a
bigger player in bigger markets--No. 3 in Syracuse with a 12
percent share of the pharmacy market.
27 Meijer 162 162
With CVS' former top merchant Larry Zigerelli at the helm, expect
the emphasis on pharmacy to continue--"Health and beauty is a strong
business for us," Zigerelli noted. A decision to move pharmacy to
the back of the store several years ago led to declining sales ...
not to mention the decision more recently to put pharmacy and HBC
back in the front of all its new stores to offer those customers
more convenience.
28 Hy-Vee 220 ([dagger][dagger]) 198
Celebrating its 75th anniversary, Hy-Vee opened its first drug
store in Cedar Rapids, Iowa, in 1969 and operates 199 pharmacies
today. The drug store business remains a major focus for the chain,
which recently changed the banner on 26 stand-alone drug stores
from Drug Town to Hy-Vee Drugstores. In the works is a new Hy-Vee
Drugstore prototype, which includes a new baby department.
29 USA/Super D 152 152
The acquisition of May's Drug Stores was a shot in the arm for the
company in a couple of ways. No. 1, May's, with a higher percentage
of pharmacy sales, generated much higher volume than pre-acquisition
USA/Super D, roughly $4.7 million per store compared with $3.5
million. No. 2, the merger brought Bob Berman, a savvy merchant,
into the USA fold. Together with the 22 Med-X stores it acquired
within weeks of the May's deal, USA/Super D extended its reach into
Oklahoma, becoming a much larger presence in the mid-South--not to
mention a larger presence in retail pharmacy.
30 Kerr Drug, 105 103
Another pioneer of disease state management (the old term for MTMs),
the company this month will open its first store dedicated solely
to patient care--the 9,000-square-foot store in Lenoir, N.C., will
feature not only a fully staffed pharmacy and pharmacy care center,
but also private offices for one-on-one patient consultations and
health screenings and in-depth disease state management. The new
store picks up where the Kerr Health Care Center--which debuted two
years ago in Raleigh and now exists in 13 of its 105 stores--left
off with an emphasis on clinical care and products and services to
help chronic care patients live more comfortably.
Source: Drug Store News, company reports
* Sales in millions; reflects fiscal year 2004 ** Reflects results
from discount stores, supercenters and Neighborhood Market operations
*** Includes supermarkets, combos and stand-alone drug stores
([daggger]) U.S. stores only ([dagger][dagger]) Includes 194
supermarkets and 26 stand-alone Hy-Vee Drugstores
([dagger][dagger][dagger]) Results include 61 May's Drug Stores and
Med-X stores acquired in July 2004 (#) Results reflect closing of
seven Kerr Drug stores and 10 remaining Smart Dollar stores
COPYRIGHT 2005 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2005 Gale Group
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