2010 Rx 2010 TOTAL TOTAL STORES RANK COMPANY SALES* CORP. SALES* STORES WITH Rx PAGE 1 Walgreens1 $44,400 $67,420 7,561 7,561 3 2 CVS Caremark 40,000 96,4132 7,182 7,123 4 3 Rite Aid 17,100 25,200 4,714 4,714 5 4 Walmart3,4 15,600 260,261 3,804 3,732 6 5 Good Neighbor Pharmacy 10,200 11,300 3,700 3,700 7 6 Cardinal5 9,000 10,300 4,300 4,300 8 7 Kroger 7,200 82,189 2,458 1,950 9 8 Health Mart 5,600 6,920 2,800 2,800 10 9 Safeway 3,700 41,050 1,694 1,320 11 10 Target 3,200 67,3906 1,755 1,565 12 11 American Associated Pharmacies 2,800 3,100 2,000 2,000 13 12 Kmart† 2,370 15,593 1,307 981 13 13 Supervalu7 2,300 28,911 2,394 805 14 14 Ahold† 2,100 23,523 751 555 14 15 Costco† 1,500 59,600 424 419 15 16 Publix 1,500 25,134 1,033 841 15 17 Sam’s Club 1,340 49,459 609 537 16 18 BioScrip 1,327 1,639 31 31 22 19 Medicine Shoppe International† 1,250 1,320 658 658 17 20 H-E-B 1,200 16,000 330 210 16 21 Giant Eagle 1,120 8,600 228 213 17 22 Hy-Vee 942 6,900 232 229 18 23 Albertsons 787 3,283 216 205 18 24 Fred’s 628 1,842 677 313 19 25 Kinney Drugs 602 789 90 90 20 FOOTNOTES 26 Shopko 592 2,010 136 135 20 1 Store count as 27 ShopRite 590 11,800 232 191 21 of end of fiscal 2010 — Aug. 31, 28 A&P 480 8,000 395 200 21 2010. Store count 29 Meijer 435 14,500 195 195 22 as of April 8, 2011, was 7,697. 30 Winn-Dixie 434 7,248 484 379 19 2 Includes pharma- 31 Hannaford 396 4,400 177 136 24 cy services segment revenue of $47.8 bil- 32 USA Drug8 390 650 140 140 23 lion, total retail sales 9 of $57.3 billion 33 Kerr Drug 370 570 76 76 23 85% — that’s more or less the combined market 3 Store count includes 34 Brookshire Grocery 308 2,200 155 113 25 2,907 supercenters, share for the companies that make up the 2011 DSN PoweRx50, approximately $185 708 discount stores 35 Raley’s 288 3,200 133 105 25 billion of the total $218 billion retail pharmacy industry. Numbering almost 50,000 stores and 189 Neighborhood 36 Sav-Mor 287 346 72 72 27 Market stores and other among them, or more than 8-of-10 of all the pharmacies in the United States — BAM! — small formats 37 Harris Teeter 285 4,100 204 126 24 the DSN PoweRx50 indisputably refl ects the true titans of the retail pharmacy industry. 4 Walmart reorganized its business in 2010 to include 38 Thrifty White Pharmacy 275 302 84 84 26 What makes the DSN PoweRx50 different? The DSN PoweRx50 is the ONLY truly results from its Puerto 39 Care Pharmacies 243 256 53 53 26 CHANNEL-AGNOSTIC ranking of the retail pharmacy industry that truly measures Rican operations in the U.S. business segment. 40 Discount Drug Mart 236 536 70 70 27 all of retail pharmacy, including traditional drug chains, independents, supermarkets, 5 Store count not including 41 Save Mart 233 4,700 241 114 28 mass and club stores — ALL of it. BA-BOOM! the Medicine Shoppe/Med- icap franchise stores, and 42 Weis Markets 233 2,620 164 128 28 Why do we do it that way? Because everybody sells everything everybody else prior to acquisition of Kinray 43 Schnucks 205 2,500 105 101 29 sells, and everyone shops everywhere for everything. Traditional drug stores fi ghting 6 Includes retail sales of $65.8 billion and credit card 44 K-VA-T Food City 200 2,000 106 76 29 for a share of that business no longer can afford to worry ONLY about competing revenues of $1.6 billion 45 Bartell Drugs 194 366 59 59 30 with other drug stores. Vendors looking to maximize distribution for their products 7 Excludes supply chain sales 8 Refl ects sale of Memphis 46 Marc Glassman 150 1,050 65 52 30 no longer can afford a myopic, single-channel view of the business. The lines that stores to Walgreens 10 once defi ned the different classes of trade haven’t just blurred — they’re GONE. 9 Including sales through spe- 47 Navarro Discount Pharmacy 114 320 28 27 30 cialty, mail-order and institu- 48 Fruth Pharmacy 111 134 25 25 31 The DSN PoweRx50 measures all of these very different companies by the one tional/clinical pharmacies metric that matters — pharmacy sales — and the relative commitment of senior 10 Store count includes one 49 Lewis Drug 80 145 32 31 31 small non-Rx location at Miami management to growing share of pharmacy, health and wellness. KA-POW! International Airport 50 Pharmaca Integrative Pharmacy 48 88 23 23 31 * All sales in millions; refl ect most recent fi scal year † U.S. stores only

1 • MAY 2, 2011 DRUGSTORENEWS.COM MAY 2, 2011 • 2 Fast, nimble Walgreens aims to own ‘well’ BY JIM FREDERICK

Walgreens, the kaleidoscopic company that wants to “own well,” is shuffl ing management and realigning operations as it works to knock down its remaining internal silos and create a seamless, broad-based retail health-and- wellness dynamo. Any snapshot of Walgreens can only present a blurred portrait. At 110 years old, the com- pany is moving so fast on so many fronts that Wall Street analysts and business journalists — not to mention drug, supermarket and mass merchandise competitors on all sides — con- stantly are trying to draw a complete picture of a shifting and multifaceted retail entity. What- ever picture emerges is likely to be outdated before you can say “8,000 points of care.” Consider Walgreens’ strategic moves just and-wellness president Hal Rosenbluth, a co- since the start of this year. In the fi rst four founder of Take Care Health Systems, which HQ: Deerfi eld, Ill. WALGREENS months of 2011, Walgreens has: Walgreens acquired in 2007. Wasson credited 2010 sales: $67.4 billion • Moved to acquire online retailer Drugstore.com Rosenbluth with a big role in the expansion % change vs. 2009: 6.4% for about $409 million. The acquisition will of “pharmacy, health and wellness services No. of stores: 7,561* add about 60,000 products to Walgreens’ on- through our Take Care retail clinics and work- No. of stores with Rx: 7,561* line offering and “signifi cantly accelerates site health centers.” Henceforth, the Take Care Avg. store size: 14,700 sq. ft. our online strategy to leverage the best com- retail and worksite division under Peter Hotz Rx sales: $44.4 billion munity store network in America,” asserted will report to Mark Wagner, president of a % of sales from Rx: 65.9% president and CEO Greg Wasson; new community management division, while Sales per store: $8.9 million • Agreed to sell its managed care division, Wal- health-and-wellness sales and clinical services, * As of end of fi scal 2010, Aug. 31, 2010, including 116 greens Health Initiatives, to Catalyst Health led respectively by chief client offi cer Joe Ter- hospital on-site pharmacies. Store count as of April 8, Solutions for $525 million in cash. Behind the rion and chief medical offi cer Cheryl Pegus, 2011, was 7,697 drugs stores in all 50 states, the District of Columbia and Puerto Rico. Source: Company reports decision to get out of the pharmacy benefi t will become part of the Walgreens pharmacy, management business, Wasson said, was the health- and-wellness services and solutions divi- need to focus on “delivering ... high-quality sion led by division president Kermit Crawford; to highlight its new Refi ll by Scan technol- pharmacy, health and wellness solutions ... to • Piloted its fi rst loyalty card program as it ap- ogy, which enables smartphone users to scan become America’s fi rst choice for health and plies the expertise it acquired with its pur- prescription label bar codes with their camera daily living needs.” As part of the deal, Cata- chase of New York’s 258-store Duane Reade phones to order refi lls — and to obtain text lyst will provide PBM services for Walgreens’ chain, a loyalty card innovator; alerts, browse Walgreens’ product selection employee and retiree drug plans, as well as • Unveiled, in early April, the fi rst of a planned and process photos. other Walgreens programs, such as the Wal- 18 rapid car-charging stations it said will open Walgreens’ underlying goal, Wasson said, is greens Prescription Savings Club. More to at Walgreens drug stores in the Dallas/Fort to be the nation’s premier destination for retail the point, Walgreens said it would retain and Worth market. Launched in partnership with health-and-wellness needs across a broad spec- continue growing its specialty pharmacy and NRG Energy, the eVgo Freedom Stations will trum of American life, including the retail are- mail-service businesses in support of Wal- comprise the nation’s fi rst privately funded na, the workplace, the home for patients with greens, WHI and Catalyst patients. “Our spe- large-scale electric vehicle charging network; serious conditions in need of specialty medica- cialty, infusion and mail pharmacy services • Named Loblaw and Duane Reade veteran tions and infusion, and the hospital and clinic are an important extension of our drug stores, Joseph Magnacca president of daily living setting. Increasingly, the 7,700-store retail and retail clinics, worksite health centers and products and solutions, in charge of integrat- health giant also is staking out cyberspace with medical facility pharmacies,” Wasson said; ing and raising the profi le of many front-end new online services and smartphone applica- • Restructured its health-and-wellness division merchandising efforts; and tions designed to reach customers and patients in line with the retirement in April of health- • Launched a new ad campaign in early March anywhere they happen to be.

3 • MAY 2, 2011 DRUGSTORENEWS.COM CVS aims for growth behind new leader BY ANTOINETTE ALEXANDER

With a new leader at the helm, a robust man- agement team in place and an unwavering focus on driving medication adherence and reducing healthcare costs, CVS Caremark remains square- ly on the growth path and continues to play an increasingly important role in U.S. health care with its far-reaching store network and arsenal of products and services. There’s no doubt that 2011 and beyond will be signifi cant for the nearly $100 billion power- house as it embarks on a new chapter under the guidance of Larry Merlo, who now holds the ti- tle of CEO as of March 1, in addition to president. Tom Ryan retired as CEO after spending 36 years CVS CAREMARK with the company and will remain non-executive break trends on top-line growth in the PBM, HQ: Woonsocket, R.I. chairman until his retirement at the company’s and 2012 is expected to be the year it breaks 2010 sales: $96.4 billion* annual meeting of shareholders in May. trends on profi t growth. % change vs. 2009: -2.3% The decision to select Merlo as the new CEO “There are many reasons for optimism about No. of stores: 7,182** came as little surprise as he has played a key role our PBM’s long-term prospects, starting with its No. of stores with Rx: 7,123 in the evolution of the company and has an im- performance in 2012. First and foremost, 2012 is pressive track record of integrating major acquisi- expected to be the strongest year in generic [drug] Avg. store size: 8,000 sq. ft. - tions. Under Merlo’s leadership, CVS completed launch history. … Second, the streamlining ben- 25,000 sq. ft. † some of the most successful acquisitions in the efi ts will begin to outweigh our investment costs. Rx sales: $40 billion history of retail pharmacy, including Longs Drug, Third, we will see a ramp in accretion from the % of sales from Rx: 68% Osco/Sav-on, Eckerd and Revco, and delivered Aetna contract. Fourth, we anticipate continued Sales per store: $8 million signifi cant organic growth in major markets growth in both specialty and the Medicare Part D * Includes pharmacy services segment revenue of $47.8 across the country. businesses. And fi fth, our focus on client service billion, total retail sales of $57.3 billion ** Retail stores † Based on retail sales Source: Company reports Merlo has indicated that under his watch, three and satisfaction, along with our innovative prod- things will defi ne CVS Caremark’s future success: ucts and services, will provide continued momen- • Flawless execution of its strategy, which is tum in renewal and new sales success,” Merlo told cal collaboration between a regional health sys- lowering healthcare costs while improving the analysts during a recent quarterly conference call. tem and MinuteClinic based on the number of health of its consumers and leveraging its inte- Furthermore, CVS Caremark’s acquisition in-store clinic locations. grated pharmacy services model; of the Medicare Part D business of Universal However, that’s not to say that the front of the • Stressing more cross-functional thinking and American will not only more than double the store is not of great importance, as evidenced by action across the company, producing even size of CVS Caremark’s Medicare Part D pro- the continued focus on and success of its Extra- higher levels of customer service; and gram, but the move also comes just as the fi rst Care loyalty program, which has been expanded • Enhancing value for all of its shareholders in baby boomers turn 65 years old. with the new ExtraCare Beauty Club, the rollout of such ways as improving dividend payouts MinuteClinic, which by 2015 is estimated to a new store brand called Just the Basics, the com- and share repurchases. operate about 1,060 clinics in 100 markets, also pletion of more than 200 urban remodels in the “We are building on a strong foundation. CVS will take on added signifi cance going forward past year and the implementation of the expanded Caremark is the leader in providing integrated as 32 million uninsured gain coverage begin- consumables planogram in about 4,000 stores. pharmacy health care. No one else has our com- ning in 2014, amid an ongoing primary care Charged with integrating all the company’s bination of the largest chain of retail stores, a physician shortage. capabilities in branding, communications and leading [pharmacy benefi t manager], the fastest- Among the most recent developments is healthcare-reform strategy to forge even stron- growing retail health clinics and a strong track MinuteClinic’s clinical affi liation with Advocate ger partnerships and further improve pharma- record of healthcare innovation,” Merlo stated. Health Care and Advocate Physician Partners cy care delivery is ExtraCare loyalty program CVS Caremark continues to stress its com- to enhance healthcare services provided to pa- architect Helena Foulkes, who was recently mitment to its PBM business as, according to tients in communities throughout Chicagoland named EVP and chief healthcare strategy and Merlo, year 2011 is the year the company will and central Illinois — marking the largest clini- marketing offi cer.

4 • MAY 2, 2011 DRUGSTORENEWS.COM RAD employs Rx initiatives, new format BY MICHAEL JOHNSEN

Rite Aid recently has put into play a number of forward-looking initiatives to help improve operations, particularly across pharmacy. The Pennsylvania-based retailer last month an- nounced its test market of six new Wellness store prototypes, and after successfully testing a 15-minute prescription guarantee in three states, Rite Aid expanded that guarantee to all states except New York. As part of the company’s segmentation strategy, Rite Aid last month opened six pilot Wellness stores that have been refi tted with new decor. “There are signifi cant changes to our merchandising, including the addition of an expanded selection of organic foods, all- natural personal care products and homeo- pathic medicines,” John Standley, Rite Aid president and CEO, told analysts last month. “These stores have additional resources to help customers obtain their wellness objectives, in- cluding expanded clinical pharmacy services [and] wellness ambassadors. The expanded clinical services include pharmacists who are diabetes care specialists, certifi ed immunizers and medication therapy management experts.” Meanwhile, wellness ambassadors will walk plained their prescriptions weren’t ready when HQ: Camp Hill, Pa. the aisles armed with information regarding promised. The ability to stand out as a phar- 2010 sales: $25.2 billion* RITE AID over-the-counter medications and supple- macy that consistently dispenses prescriptions % change vs. 2009: -1.8% ments. “Many of the wellness ambassadors within 15 minutes could be a game changer, es- No. of stores: 4,714 are pharmacy technicians who have received pecially as speed of service becomes more para- No. of stores with Rx: 4,714 additional training,” Robert Thompson, EVP mount. The Consumer Reports survey found that Avg. store size: 12,400 sq. ft. pharmacy, told Drug Store News. “Their skill 49% of respondents cited speed of service as Rx sales: $17.1 billion set is already pretty substantial, and they can an important consideration in choosing a drug % of sales from Rx: 67.8% be part of the bridge between the front-end store, compared with 24% in their 2002 survey. and the pharmacy. They can help customers on “The vast majority of prescriptions at Rite Sales per store: $5.3 million the fl oor, and if they have a question that needs Aid are fi lled within 15 minutes anyway,” * For fi scal year 2011, ended Feb. 26 Source: Company reports to be answered, [those pharmacy technicians] Thompson said. “Our NexGen dispensing sys- can fi nd the right resource and encourage ad- tem is the backbone to fi lling prescriptions and ditional conversations with the pharmacist.” is built around a rigorous quality assurance All told, Rite Aid will be remodeling as process. There are many checks and balances ing its new Wellness store pilots, and the many as 500 stores in the coming fi scal year, in- built into the system to ensure that quality and 15-minute guarantee both serve to draw cus- cluding both Wellness and value formats that safety is foremost in dispensing the prescrip- tomers into the store, but Rite Aid’s successful will better target each pharmacy to the commu- tion.” Thompson noted that the guarantee does loyalty program is a signifi cant factor in keep- nity it serves. not include counseling, compounding or where ing them coming back. “Wellness+ members Rite Aid’s 15-minute prescription guarantee information is needed from the prescription accounted for 67% of front-end sales and 58% should serve as a key trial driver. Last month, provider or insurer. “[The 15-minute guarantee] of our script count during the quarter,” Stand- a Consumer Reports survey revealed that 21% is about recognizing and respecting consumers’ ley said. Standley reported 36 million Well- of pharmacy customers were dissatisfi ed by a desire for prompt service,” Thompson added. ness+ members as of mid-March, up from 29 perceived slow speed of service, and 15% com- Rite Aid’s segmentation initiatives, includ- million reported in mid-December.

5 • MAY 2, 2011 DRUGSTORENEWS.COM WMT remains health, wellness stalwart BY MIKE TROY

It has been a challenging few years for Walmart among ongoing sales diffi culties, restructuring of senior leadership and the pursuit of a new, yet familiar, strategic direction. Despite all the tur- moil and the constant media attention it received, Walmart’s health-and-wellness business unit re- mained a steady performer through 2010. The category of health and wellness — defi ned by Walmart to include the pharmacy and optical services — accounted for 11% of sales of $260 bil- lion last year, versus 10% of roughly the same lev- el of sales the prior year. There also was a mod- est increase in the number of pharmacies, which numbered 3,732 versus 3,694 the prior year. So there was some growth; it just wasn’t the look for a meaningful increase in the number of

blistering pace set during the ’90s or earlier last Walmart pharmacies anytime soon. The profi ts HQ: Bentonville, Ark. WALMART decade when hundreds of new stores with phar- Walmart generates are increasingly being used to 2010 sales: $260.2 billion* macies were opening annually and Walmart deliver shareholder value in ways other than new % change vs. 2009: 0.13% was gobbling market share. Rather, the past few store growth. For example, share repurchases and No. of stores: 3,804* years, it has been Walmart ceding market share dividends now consume signifi cantly more cash No. of stores with Rx: 3,732* to a wide range of competitors as evidenced by than capital expenditures on new stores. Avg. store size: 183,900 sq. ft. nearly two years of quarterly same-store sales de- The biggest opportunity for Walmart to achieve Rx sales: $15.6 billion clines. The company aims to reverse that trend by a meaningful increase in its pharmacy count lies % of sales from Rx: 6% relying on familiar strategies of offering everyday in the development and subsequent expansion low prices on the broadest assortment of goods in of small-format stores, which are included in Sales per store: $68.4 million the marketplace, supported by a simplifi ed price this year’s capital budget. The company plans to * Includes 2,907 supercenters, 708 discount stores and 189 Neighborhood Market stores and other small formats match program that allows cashiers to make on- opens its fi rst truly small-format stores this year Note: Walmart reorganized its business in 2010 to include results the-sport adjustments. in an experiment in which some units will con- from its Puerto Rican operations in the U.S. business segment. Source: Company reports, DSN estimates The messaging is sure to sound familiar to tain prescription departments and others will not. customers since it served as the company’s core When the fi rst of these new Walmart Express value proposition for decades. It is conceivable stores opens this spring in Northwest Arkansas, sion was always that supercenters offer a higher and perhaps even likely that with Walmart speak- just in time for the company’s shareholders meet- rate of return. Now that it is 2011 and supercenter ing to consumers again, it will see a rebound in ing, they are sure to attract considerable interest growth has slowed, there would appear to be customer traffi c. Comp-store sales growth also is due to their potential impact on the marketplace a place in Walmart’s store portfolio for smaller a realistic possibility, especially since comparisons if Walmart is able to grow the concept. units. However, a new competitor now exists for with prior years are easing, and a bit of infl ation, That’s a big “if.” While no one doubts Walmart capital — in the international area. Of Walmart’s which all retailers appear to be passing through would be capable of opening huge numbers of $12.7 billion in capital expenditures last year, the to consumers, will contribute to above-average small stores annually or that the potential exists bulk of it was for new stores, and the U.S. and transaction sizes. to make a real-estate acquisition to facilitate more international division were each allocated 33% of These factors are poised to benefi t the health- rapid expansion, the fi nancial viability of any that amount. However, internationally, Walmart and-wellness business since an increase in custom- type of small format is hardly a given at this point gets more bang for its buck. Walmart added 23 er traffi c will be arising as merchandising changes — this despite the fact that Walmart has ample million sq. ft. of new selling space internation- are taking place under the leadership of new chief experience with small stores in international mar- ally, whereas in the United States, a comparable merchandising offi cer Duncan Mac Naughton. kets and presumably should be able to capitalize expenditure netted only 10 million sq. ft. of new Walmart is placing a greater emphasis on new on that expertise with a U.S. variant. space. In addition, the company faces consider- items and once again relying on in-aisle feature The company has been down this path before ably less aggravation in many of its international displays of sharply priced products to drive sales. with Neighborhood Market. Developed in the markets as its proposition of low prices and qual- While a return of some familiar merchandising late ’90s, there are fewer than 200 of the stores to- ity merchandise for consumers and jobs with strategies is seen as helping top-line results, don’t day, and the reasoning for the slow pace of expan- benefi ts is greeted more warmly.

6 • MAY 2, 2011 DRUGSTORENEWS.COM Tops in satisfaction, GNP leverages scale BY JIM FREDERICK

The way chief executive R. David Yost sees it, AmerisourceBergen Corp.’s Good Neighbor Pharmacy program is a bulwark for indepen- dent pharmacists against the pressures of a brutally competitive pharmacy market and an unforgiving economy. Now numbering more than 3,700 independent pharmacies across the United States and Puerto Rico, GNP has become one of the largest drug store brands in the United States. By leveraging the best qualities of the owner-operated pharma- cy — a strong community presence, personalized service and the fl exibility and willingness to cater to the individual needs of patients — and blend- ing them with the economies of scale, marketing expertise and buying power available to the big retail chains, AmerisourceBergen has built GNP into a powerful national brand. GNP Premier program, launched three years Consumers appear to be taking notice. For ago, members also get expertise in managing HQ: Valley Forge, Pa. the fi rst time last year, J.D. Power & Associ- their business and pricing their merchandise 2010 sales: $11.3 billion ates ranked GNP No. 1 in customer satisfaction more profi tably, and targeting their best cus- % change vs. 2009: 4.6% among all pharmacy retailers, based on a na- tomers. Participating independents also can No. of stores: 3,700 GNP tionwide survey of more than 12,300 pharmacy benchmark their operation and business perfor- No. of stores with Rx: 3,700 customers. What’s more, GNP’s selection as mance against a peer group of similar pharma- Avg. store size: 3,100 sq. ft. best in service and personal care by consum- cies through the GNP InSite market database. Rx sales: $10.2 billion ers came in “the fi rst year that they have been a GNP pharmacies also participate in their % of sales from Rx: 90% ranked brand in the study,” said Jim Dougherty, parent fi rm’s massive generic purchasing and Sales per store: $3.1 million J.D. Power’s director of healthcare practice. pricing program, PRxO Generics, for “com- In a recent report, ABC succinctly described its petitive pricing and new generic products from Source: DSN estimates relationship with its huge network of GNP-affi l- [more than] 100 manufacturers as soon as they iated independent drug stores. “We deliver pre- are launched. We provide our customers the fi - utive suite with the pending departure of its top scription pharmaceuticals, private-label [over- nancing they need to buy the products. We then executive. Yost announced in March he would the-counter] drugs and other health-related items use our own purchasing power to secure the retire July 1 after nearly 37 years, the last 14 of daily, and we provide business coaching services, best possible value,” ABC reported. them as CEO. Succeeding Yost is COO Steven marketing support and access to managed care The 3,700 GNP stores also benefi t from cen- Collis, and moving up to president of Ameri- networks,” the company noted. trally developed ABC programs “designed to sourceBergen Drug Co. is David Neu, who last Key to its relationship with GNP stores, ABC drive continuous improvement, compliance served as SVP operations. said, is its full-service approach to supplying and market penetration,” the company noted. GNP also is under relatively new manage- its customers. “We serve the vast majority of Among those programs: the GNP Provider Net- ment. Last August, ABC promoted Mike Cantrell our customers on a prime vendor basis, which work, which links the 3,700 GNP independent to president of GNP, a new position, and group means that we provide all of the products that a operators together with “small and regional VP retail business development. Cantrell, who pharmacy needs to serve its patients on any giv- chain drug stores and food-and-drug combina- was VP professional services at Longs Drug en day. Due to the high cost of pharmaceuticals, tion stores” served by ABC, according to the Stores before joining ABC as VP central fi ll busi- providers do not hold large amounts of inven- company. Together, that national group of inde- ness development in 2009, reports to Jerry Cline, tory on hand; rather, they rely on ... just-in-time pendents, small chains and supermarket phar- SVP retail sales and marketing. One primary role delivery of the products they need,” ABC said. macies comprise “the fourth-largest managed for GNP, Cantrell said, will be “helping our phar- ABC brings “tremendous scale” and “op- care provider network in the United States,” macists develop their role in healthcare reform, erating effi ciency” to its independents via this according to ABC. with the understanding that they are a signifi cant model, the company reported. Through the Meanwhile, changes are afoot in ABC’s exec- component of the solution.”

7 • MAY 2, 2011 DRUGSTORENEWS.COM Cardinal reinforces true ‘independence’ BY JIM FREDERICK

Embrace diversity. You don’t have to be Lead- er to be a leader. That is Cardinal Health’s modern message to its roughly 6,300 independent pharmacy custom- ers that aren’t members of its franchise division of Medicine Shoppe and Medicap pharmacies. In a gradual but sweeping shift in how it goes to market, the wholesale and health services gi- ant has reduced its emphasis on the Leader store brand in favor of a new approach to the phar- macy market on behalf of its sprawling base of independent pharmacies. While not in any sense abandoning the Leader logo or its marketing and ad circular programs, Cardinal has developed a more customized and store-specifi c approach to its retail network that encourages each pharmacy owner-operator to fully develop his or her own brand and local market identity. Cardinal’s customers can still participate in all “We’re focused more on growing our inde- Leader programs, and many do, says company pendent base of customers, not necessarily on HQ: Dublin, Ohio

spokeswoman Tara Schumacher. But indepen- growing the number of Leader customers,” she 2010 sales: $10.3 billion CARDINAL dents by nature want to trade on their own brand added. “It’s about whatever makes the most % change vs. 2009: NA of personal service and their own good name to sense to our customers’ businesses. So if an inde- No. of stores: 4,300* build customer loyalty. Cardinal, she said, has pendent pharmacy wants to market themselves No. of stores with Rx: 4,300* realigned its independent pharmacy division as Joe’s Pharmacy, we’ll support them in that; if Avg. store size: 2,600 sq. ft. under Steve Lawrence, SVP independent sales they want to market themselves as Joe’s Leader Rx sales: $9 billion and marketing. The new paradigm: customer- Pharmacy, we’ll help them with that, too.” % of sales from Rx: 87% specifi c fl exibility in marketing, merchandising The shift in approach culminated on July 23, Sales per store: $2.4 million and store support. 2010, when Cardinal unveiled a broad set of new * That new, let-the-owner-decide-what’s-best ap- applications designed to help independents com- * Not including the Medicine Shoppe/Medicap franchise stores, and prior to acquisition of Kinray proach is what greeted the roughly 2,000 indepen- pete far more effectively under their own hard- Source: DSN estimates dent pharmacists who swelled Cardinal’s custom- won marketplace identities. Cardinal called it er ranks when the company fi nalized its buyout of “the industry’s fi rst fully customizable suite of Kinray, the nation’s largest independently owned marketing tools that enable independent pharma- commercials, store circulars and other market- drug wholesaler, early this year. And for those cists to build and market their own brand within ing activities; owner-operators accustomed to Kinray’s highly their communities — without having to tie their • Cardinal’s new in-store radio system, which al- individualized and high-touch brand of service, marketing efforts to a national banner program.” lows for store-specifi c ads; the change must have been a welcomed one. The change was based on “extensive customer • A new, customizable in-store signage and cir- Under Cardinal’s new strategy, “if an inde- research [that] told us that an increasing number cular system; pendent pharmacy wants to market itself under of retail pharmacies want to be able to exclusively • A new outbound calling system to help phar- what it perceives is a broader brand, but wants market their own store names in their local com- macies improve patient relationships and to be an independent pharmacy and not a fran- munities,” Lawrence said. “But until now, they medication adherence, linked to the store’s chise, they can still have all the Leader program haven’t had easy-to-use, quality marketing tools pharmacy system for reference tracking; and materials — store banners, signs, circulars,” that can help them do that in a cost-effective way.” • A new series of radio and TV ads that can be Schumacher told Drug Store News. “But instead Now available to Cardinal’s customers: customized to promote an individual store’s of encouraging customers to become Leader • Customized store websites that can fea- brand, products and services. stores, we now offer local store marketing servic- ture a store’s full brand identity, along “A lot of our customers have said, ‘we like the es, where we’ll help any customer build aware- with online order refi lls integrated with a brand equity we have.’ So now the marketing ness of their own store name.” store’s pharmacy system and tie-ins with materials can refl ect just that,” Schumacher said.

8 • MAY 2, 2011 DRUGSTORENEWS.COM Resilient Kroger readies for recovery BY JIM FREDERICK

In retailing, it’s a given that a long-term, severe recession will cut through the ranks of food, drug and general merchandise retailers like a scythe through wheat, pushing weaker players out of the market as consumer spend- ing dries up and Darwinian realities winnow the fi eld. But it’s also true that the strongest merchants can emerge not only intact, but also with even brighter prospects if they innovate, invest and retain the loyalty of their customers. Clearly, Kroger belongs in the latter category. The Cincinnati-based supermarket and combo- store behemoth weathered a tough 2010 with a 2.8% increase in same-store sales across its mul- tifaceted retail empire and net earnings of more than $1.1 billion. The company also increased share of grocery sales by 80 basis points, accord- ing to Nielsen research, and in the fi nal months of the fi scal year ended Jan. 29, 2011, appeared to regain momentum in drug and non-food sales. “Kroger’s business proved resilient in 2010, weathering a challenging environment that con- Utah, Fry’s Food & Drug in Arizona and Fred tinued to affect many of our customers,” said Meyer in Oregon. HQ: Cincinnati chairman and CEO David Dillon in March. “We In 2010, Kroger also purchased its erstwhile 2010 sales: $82.2 billion were particularly pleased to see solid growth partner in walk-in patient-care centers, The % change vs. 2009: 7.2% KROGER in our drug/general merchandise department Little Clinic. The buyout gave it control of one No. of stores: 2,458 where sales had softened during the recession as of the nation’s largest operators of retail-based customers scaled back discretionary purchases.” clinics, with 77 professional centers in select No. of stores with Rx: 1,950 Sadly, the start of Kroger’s new fi scal year Kroger, Fry’s and King Soopers stores in Ohio, Avg. store size: 73,000 sq. ft.* also witnessed the loss of one of its top pharma- Kentucky, Tennessee, Arizona and Colorado. Rx sales: $7.2 billion cy and non-food executives, EVP Don Becker, a The company also provides management for % of sales from Rx: 8.8% 42-year company veteran who died unexpect- 40 branded clinics in Florida and Georgia. Sales per store: $33.4 million

edly in February at 62 years old. Becker oversaw In the midst of a tough economy, Kroger also * New food/drug combo prototype drug, grocery and general merchandise buying, invested a total of roughly $2 billion last year Source: Company reports marketing and merchandising, and also was re- in store remodeling, the Little Clinic purchase, sponsible for The Little Clinic operations. new technology and other improvements. Dillon called Becker a “dear friend and ex- Steady investments in automation have helped expand pharmacy and clinic-based services, traordinary leader” who “leaves a legacy of en- transform the pharmacy, where pharmacists including a variety of immunizations and bio- thusiasm and passion for doing what’s right.” in any of its stores and operating companies metric screenings for such conditions as diabe- Despite that major setback, Kroger appears can see into any customer’s patient profi le and tes, hyperlipidemia and obesity. Some Kroger to be laying a solid foundation for continued prescription record via its nationally integrated pharmacists also now participate in long-term success. The company operates 1,950 in-store pharmacy automation platform. That system, programs for diabetes management, education pharmacies that fi lled nearly 140 million pre- called the EasyFill Pharmacy Retail Network, and coaching, in coordination with registered scriptions in 2010. allows pharmacists “a single view of the patient dietitians and certifi ed diabetes educators. Besides a strong presence in the fl agship across Kroger,” according to Chris Hjelm, SVP Kroger also continues to wield one of retail- Kroger combo stores, that pharmacy network and CIO. The system also tracks all pharmacy ing’s most effective loyalty card programs. The sprawls across a complex web of such regional transactions in real time, he said, so “we know company reported that more than 90% of its chains as King Soopers in Colorado, Ralphs when a prescription is sold, not just fi lled.” customer transactions now involve the use of in California, Smith’s Food & Drug Centers in Kroger’s pharmacy team also continues to the Kroger card.

9 • MAY 2, 2011 DRUGSTORENEWS.COM Health Mart tops for service, patient care BY MICHAEL JOHNSEN

In the May issue of Consumer Reports, a re- port found that such independents as McKes- son’s Health Mart franchise group are deliv- ering the goods. McKesson helped capitalize on what has al- ways been an exemplary Health Mart patient experience at the top of last year with a multi- million-dollar ad campaign that included an ad during the New Orleans Saints/Indianap- olis Colts Super Bowl. That 2010 campaign featured real Health Mart pharmacists with stories on how they have impacted their local communities by taking the time to care and provide special services. Along with Bayer Diabetes Care and Novo Nordisk, Health Mart in 2010 also kicked off the Health Mart Healthy Living Tour, a na- tional diabetes awareness and health screen- ing tour focused on the role of pharmacists partnering in diabetes care. “The program featured a mobile screening unit that traveled across the country to raise diabetes awareness through free health screenings and educa- tion,” explained Tim Canning, Health Mart small-town service of a pharmacist active

president. “The tour ... emphasized the key within their community and the branding HEALTH MART HQ: San Francisco role of pharmacists in diabetes care, encour- and effi ciency driven by such technology as aging consumers to initiate healthy conversa- EnterpriseRx that typically is associated with 2010 sales: $6.9 billion tions with their community pharmacists,” he much larger pharmacy chain competitors. % change vs. 2009: 11.8% said. “As a result of focusing on greater-risk “Our EnterpriseRx pharmacy management No. of stores: 2,800 communities across many different states, system helps pharmacy staff manage their No. of stores with Rx: 2,800 49.7% of the tour patients screened were iden- workload more effi ciently with Promise Time Avg. store size: 1,000 sq. ft.- tifi ed as at risk for diabetes.” Workfl ow, which makes sure the right person 10,000 sq. ft. While Consumer Reports features Health is doing the right task at the right time,” Can- Rx sales: $5.6 billion Mart as a good example of the kind of expe- ning said. “This helps ensure that the phar- % of sales from Rx: 81.2% rience patients are fi nding at independents, macy is running as effi ciently as possible with Sales per store: $2.5 million the network also has been recognized for its the technicians focused on labeling, counting outstanding service elsewhere. J.D. Power in and fi lling, while the pharmacist focuses on Source: Company reports February named Health Mart as 1-of-the-40 prescription validation, as well as patient and companies that was a J.D. Power 2011 Cus- physician consultations.” tomer Service Champion. “When this was “The workfl ow [associated with Enter- betes counseling and medication ther- announced, Leslie Sauzek, owner of Moody priseRx] has allowed us to be more organized, apy management. In Wisconsin, for example, Health Mart Pharmacy in Sparta, Ill., com- which has drastically increased our ability to McKesson’s Health Mart locations are piloting mented on how the fact that Health Mart have more patient care,” reported Katie Butt an MTM program that electronically connects provides locally owned pharmacies with a na- Beckart, president of Butt Drugs Health Mart pharmacists with the physician, the payer and tional identity helped make it possible for the Pharmacy, in a recent McKesson video. the patient to help drive consistent outcomes. network to be recognized by consumers on a Pharmacy automation tools, such as Parata Those kinds of intervention services can real- national level,” Canning noted. Systems, also help spring the Health Mart ize savings between $500 and $1,500 for partic- Health Mart epitomizes the best of both pharmacy operator from behind the bench to ipating payers, and as much as $450 in savings ends of the pharmacy service spectrum: the provide more healthcare services, such as dia- for the patient, McKesson has reported.

10 • MAY 2, 2011 DRUGSTORENEWS.COM Safeway rebounds with sharper focus BY JIM FREDERICK

After being hemmed in by recession, cash fl ow problems and costs, a venerable lion of West Coast food and drug retailing is roaring again. Safeway shed a few more unprofi table stores in 2010 and early 2011, but emerged with sales and earnings results that help affi rm its long- term strategy. The chain generated sales of $41.05 billion in the fi scal year ended Jan. 1, 2011, up less than half a percent from the previous year. But with a smaller, more productive store base and other improvements came a return to profi tabil- ity; net income for fi scal 2010 was $589.8 million, compared with a net loss for 2009 of $1.1 billion. Chairman, president and CEO Steve Burd cit- ed “price reductions, reinvigorated private-label brands and targeted marketing” for the upturn, as well as new curbs on shrink and operating costs. In the midst of a still diffi cult economy in 2010, Safeway also opened or remodeled another 74 stores in line with its Lifestyle prototype, which offers customers “wood-like fl ooring, relaxing will regulate retail pharmacy operations, special- HQ: Pleasanton, Calif.

earth-toned decor and subdued lighting with ty care, pharmacy services, compliance, benefi t 2010 sales: $41.05 billion SAFEWAY spotlights on featured products … [for] a warm, management and managed care. He will report % change vs. 2009: 0.5% inviting ambience,” according to the company. to merchandising president Kelly Griffi th. No. of stores: 1,694 “Our … store renovations are almost complete, Singer, who among other roles at GSK was VP No. of stores with Rx: 1,320 with 85% of our 1,694 locations now transformed marketing for OTC wellness, could bolster Safe- Avg. store size: 46,000 sq. ft. into Lifestyle stores,” Burd reported Feb. 28. way’s ongoing efforts to marry pharmacy with Rx sales: $3.7 billion Pleasanton, Calif.-based Safeway remains one health and nutrition. “His … proven track record of the nation’s top pharmacy retailers. Pharma- in running some of the most visible and valuable % of sales from Rx: 9% cies operate in nearly 80% of its 1,694 supermar- brands in the pharmacy and wellness industry are Sales per store: $24.2 million kets, giving it some 1,320 in-store pharmacies well-suited to his leadership role,” Griffi th said. Source: Company reports, DSN estimates across a broad swath of the western and south- Safeway calls its pharmacists “experienced western United States and in the Philadelphia health consultants” who provide immunizations market. That healthcare prowess is tied to a for whooping cough, tetanus and other condi- or more of 22 different nutrition and ingredient reputation as one of America’s top supermarket tions, along with the fl u. Increasingly, the com- benefi ts for tagged items — e.g., organic, gluten- sources for organic and healthier-choice foods. pany is taking such health services as immuni- free or low-sodium products. Barbara Walker, In April, Safeway took a big step to regain- zations and health screenings outside the stores group VP consumer communications and brand ing full power in its pharmacy division with the and into local businesses, schools, senior centers marketing, called it “a quick snapshot of the nutri- hiring of pharmaceutical industry veteran Dar- and other settings. tion and ingredient benefi ts” of many foods. ren Singer as its new SVP pharmacy, health and Safeway also is aligning those pharmacy care Safeway also has broadened its nutritional wellness. The appointment fi lls a long-running programs with a broader message designed to ap- message appeal with another branded line of management void that opened a full year earlier, peal to the total health-and-wellness needs of con- healthier foods. Launched in late January, Open when Dave Fong, Safeway’s top pharmacy ex- sumers. In mid-February, those efforts got another Nature is a new line of more than 100 naturally ecutive, left the company as SVP pharmacy and boost with the launch of SimpleNutrition, a shelf raised and unadulterated foods, beginning with family health. Fong’s position had been fi lled tag system designed to make it easier for shoppers products sold in the meat departments. The on an interim basis by Gary Rocheleau, but no to fi nd better nutrition choices. Safeway called the brand — which joins Safeway’s other healthy- permanent replacement had been named since new green tags “a fi rst step in helping customers alternative brands, O Organics and Eating Right Fong’s quiet departure in April 2010. modify the selection of products that support a — will expand to other food categories through- Singer, a 25-year veteran of GlaxoSmithKline, healthier lifestyle,” and said the tags point out one out 2011, the company reported.

11 • MAY 2, 2011 DRUGSTORENEWS.COM Target preps cross-border, urban moves BY JIM FREDERICK

Target is branching out. Buoyed by surging profi ts and customer satisfaction scores, the Minneapolis-based giant is reaching into Canada, preparing a new small-store format for urban areas and going after a bigger share of the nation’s gro- cery dollar. Target also is spending billions on store renovations, aggressively leveraging a new loyalty card program and growing its commitment to health at its pharmacies and in-store clinics. Target executives have been energized by the company’s ability to navigate the Great Recession and maintain consumer loyalty. Behind their optimism: a 21% jump in per- share net earnings in fi scal 2010, ended Jan. 30, 2011, along with a respectable 2.1% increase in same-store sales. For the year, net income surged 17.4% to $2.92 billion, with sales up 3.7% to $65.8 billion. In early April, the company received more affi rmation when consumers, for the second year in a row, named Target the nation’s top value retailer in the 2011 Harris Poll “Equi- Trend” survey. Target chairman, president and CEO Gregg Steinhafel laid out bold plans for the Minneap- livan Center, site of the former Carson Pirie HQ: Minneapolis

olis-based chain. “In 2011, we will continue to Scott department store. 2010 sales: $67.4 billion* TARGET focus on driving sales and traffi c and provid- Target announced early this year its move % change vs. 2009: 3.7% ing an enhanced shopping experience through into Canada, through the purchase for US$1.91 No. of stores: 1,755 key strategic initiatives that include our am- billion of Zellers, a subsidiary of Hudson’s No. of stores with Rx: 1,565 bitious remodel program, 5% REDcard Re- Bay, which operates big-box discount stores, Avg. store size: 110,000 sq. ft. wards and the launch of our new Target.com many with pharmacies. The purchase of as Rx sales: $3.2 billion platform,” he said. “Beyond 2011, we plan many as 220 Zellers store locations “will allow to expand our store footprint in new ways, us to open 100 to 150 Target stores in Canada, % of sales from Rx: 4.8%* opening our fi rst CityTarget stores in 2012 and primarily in 2013,” the company reported. Sales per store: $37.5 million opening 100 to 150 Canadian Target stores in Target offi cials predicted they would spend * For fi scal 2010, ended Jan. 30, 2011; includes retail sales of $65.8 billion and credit card revenues of $1.6 billion 2013 and 2014.” roughly US$1.05 billion to renovate the stores Source: Company reports, DSN estimates The CityTarget stores will be roughly and expected the stores will generate as much half the size of the company’s 110,000-sq.-ft. as $6 billion by 2017, CFO Douglas Scovanner prototype and reportedly will carry a large told analysts in May. including more than 250 SuperTarget centers, offering of fresh foods and a more limited Target also will spend $2.5 billion in the some 1,565 stores with pharmacies and more assortment of apparel and general merchan- United States this year alone, “driven primar- than 460 units with its expanded “PFresh” dise geared to in-town living. Target recently ily by a larger remodel program.” Remodeled assortment of fresh foods. The addition of unveiled plans to open “small-format loca- units feature an expanded “PFresh” fresh food PFresh boosted per-store sales an average of tions” in urban markets across the United layout, wider aisles and a beauty department 6% to 10%, according to reports, and Target States, beginning with the fi rst CityTarget that offers what the company said is “a more has made fresh foods a priority growth initia- store in Chicago at the intersection of Madi- engaging shopping experience.” tive. This year, roughly 400 more stores will son and South State streets in the historic Sul- Target now operates 1,755 stores in 49 states, feature the sections, according to the company.

12 • MAY 2, 2011 DRUGSTORENEWS.COM AAP pursues ‘road to true independence’ BY JIM FREDERICK negotiation of all contracts,” and “gross margin analysis and responsive third-party reimburse- Its leaders and member-owners call it “the ment issue resolution.” newest and best independent pharmacy coopera- In addition, said AAP spokesman Brett Dou- tive in the nation.” It’s certainly one of the largest. cette, there is a growing list of “back-offi ce ser- American Associated Pharmacies was cre- vices.” Among them: ated in September 2009, the result of the merger • A billing reconciliation service called TrueScript of United Drugs and Associated Pharmacies, Reconciler that helps with processing of central- or API. The combined co-op offers its members ly paid claims, along with a reporting system “additional buying leverage” and a “larger net- to monitor receivables and manage collections; work of pharmacies for managed care contract- • A sophisticated order-entry system called Scan ing.” The overriding goal: to enhance members’ & Toss that links stores with the API ware- HQ: Scottsboro, Ala. “profi tability and survivability” by wielding the house and AAP’s primary wholesaler, Cardi- 2010 sales: $3.1 billion combined clout of its 2,000 affi liate drug stores. nal Health, via use of a hand-held scanner that % change vs. 2009: NA Said AAP president and CEO Jon Copeland, automatically searches for product availability No. of stores: 2,000 AAP “true independence today can be gained only and the lowest price before placing the order; with interdependence with a true cooperative • A service called Profi tMinder that tracks down No. of stores with Rx: 2,000 that is owned by its members.” billing errors and other ineffi ciencies that Avg. store size: 2,000 sq. ft. Among the core services offered to those could be draining members’ profi t dollars; and Rx sales: $2.8 billion members, a spokesman said, are a massive • An increasingly sophisticated planogram % of sales from Rx: 90% warehouse and distribution center in Alabama and shelf-slotting service that connects in- Sales per store: $1.6 million — a legacy of API — along with a managed-care dependents with rebate opportunities from Source: Company reports, DSN estimates contracting program that delivers “analysis and OTC manufacturers. Kmart perseveres with Rx, clinic deals

BY ALARIC DEARMENT emphasizing the ability of the infl uenza virus to persist as late as May, past its usual peak One has to admire a person who perseveres season. The company also emphasized the ex- through hardship and diffi culty, and the same pertise of its pharmacists, available to patients goes for companies that keep going and keep try- with health-related questions. ing, no matter what the market throws at them. Previously, the chain had offered fl u vaccina- One such company is Sears Holdings and tions for $25 at its walk-in fl u clinics. Custom- its mass-merchandise chain Kmart. Kmart has ers who bought a fl u vaccination also received borne the brunt of a diffi cult economy in recent a coupon book worth up to $45 and a 10%-off years, facing store closings across the country shopping pass for use on health and beauty and declining sales. U.S. sales for the chain products and consumables. HQ: Hoffman Estates, Ill. in 2009 were $15.7 billion, when it had 1,327 Kmart also has leveraged its status as a 2010 sales: $15.6 billion* stores, but last year, that number declined to mass merchandise retailer to attract custom- % change vs. 2009: -0.64% $15.6 billion in 1,307 stores. But that hasn’t ers to its pharmacies. In October 2010, it in- No. of stores: 1,307 stopped Kmart from offering important ser- troduced a program whereby customers who No. of stores with Rx: 981 vices at its in-store pharmacies, whose number transferred their prescriptions over received Avg. store size: 93,000 sq. ft. totaled 981 last year. a $20 Kmart gift card for each prescription Rx sales: $2.4 billion In February 2011, Kmart began offering fl u transferred, for up to fi ve prescriptions per shots to customers at 500 of its pharmacies at household. In addition, it introduced the KMART % of sales from Rx: 15% Sales per store: $11.9 million the reduced price of $15 — or for free to Medi- “Transfer for a Cause” program, also donat- care Part B benefi ciaries — while giving those ing $5 for up to fi ve prescriptions to the Breast * U.S. stores only Source: Company reports, DSN estimates who were members of the Shop Your Way Re- Cancer Research Foundation in recognition of wards program 15,000 points — a $15 value — Breast Cancer Awareness Month.

13 • MAY 2, 2011 DRUGSTORENEWS.COM Ahold’s rewards, programs fuel sales BY ALARIC DEARMENT program designed to educate children, their parents and teachers on nutrition and healthy Pharmacy retailers always are looking for lifestyles, including lessons that cover the food ways to leverage the resources they have in order pyramid and physical activity, food labels and to attract customers, whether they’re drug stores, portion control, and how to eat a balanced diet. supermarkets or mass merchandisers. One su- “Childhood obesity has become a growing permarket operator is using its gas stations to health issue, and it’s important for both kids bring customers to the counter. and their parents to understand what they can Royal Ahold’s Giant-Carlisle, Giant-Landover do to eat healthy and maintain an active life- and Stop & Shop customers who pay for their pre- style,” Giant-Carlisle health-and-wellness man- scriptions out of pocket from most of the chain’s ager Shirley Axe said. pharmacies can earn reward points that they Meanwhile, Giant-Landover partnered with HQ: Amsterdam, Netherlands can put toward car fuel purchases. Under Giant- the YMCA of Metropolitan Washington to com- 2010 sales: $23.5 billion* Landover’s Gas Rewards program, for example, bat childhood obesity by encouraging healthy % change vs. 2009: 5.1% AHOLD customers earn a point for every dollar they spend lifestyles, with Giant supporting the YMCA’s and get 10 cents off of every gallon of gas bought “Physical, Healthy & Driven” program, designed No. of stores: 751 at Giant and participating Shell gas stations. to help children ages 6 to 13 years integrate phys- No. of stores with Rx: 555 In addition to pharmacy programs, Ahold ical fi tness and healthy eating into their daily rou- Avg. store size: 55,000 sq. ft. banners offer a number of health-and-wellness tines. The YMCA will take its PHD on the Move Rx sales: $2.1 billion programs, using the innate ability of all super- mobile playground to several Giant-Landover % of sales from Rx: 9% markets to promote healthy eating. In Septem- locations throughout 2011, while the two are Sales per store: $31.3 million ber, Giant-Carlisle and Martin’s Food Markets creating a Healthy Snack campaign to educate * U.S. stores only launched Passport to Nutrition, a Web-based families about the pitfalls of snacking. Source: Company reports, DSN estimates Supervalu blends food, health, pharmacy

BY MICHAEL JOHNSEN Earlier this year, Supervalu expanded its in- store nutrition navigation program “Nutrition Supervalu operates under the maxim that the iQ” to include the fresh food departments and pharmacy division exists as the “solution center more robust nutrition information for the center for the sick and destination for the healthy.” In store where Supervalu already has evaluated other words, Supervalu pharmacy endeavors to more than 80,000 products. The Nutrition iQ pro- be that retail rarity: all things to all people. If it has gram, launched in 2009 in collaboration with di- something to do with health and wellness, treat- etitians from Joslin Clinic, currently is available ments or prevention, Supervalu has an answer. across more than 800 Supervalu banners. The Supervalu’s health-and-wellness proposition Minnesota grocer launched the new program HQ: Eden Prairie, Minn. is supported by four pharmacy service pillars through its Albertsons stores in Southern Califor- 2010 sales: $28.9 billion* — immunizations, medication therapy manage- nia and Nevada at the beginning of the year. % change vs. 2009: -8.6%* ment, health screenings and adherence programs The fresh departments now feature informa- No. of stores: 2,394 — and is bridged between pharmacy and food by tional signs highlighting key attributes of the way of dedicated how-to-shop-for-health tours. foods receiving Nutrition iQ signs, such as “ex- No. of stores with Rx: 805 “We really feel there is a tie-in with the food cellent source of fi ber,” “helps support healthy Avg. store size: 60,000 sq. ft. store that offers us a competitive advantage,” said digestion” and “excellent source of vitamin C.” Rx sales: $2.3 billion Chris Dimos, president of Supervalu pharmacy, Supervalu also has made signifi cant progress % of sales from Rx: 8% noting that food pharmacies have become ad- in developing comprehensive clinical programs Sales per store: $12.1 million ept at connecting the dots between wellness and and services, Dimos said, such as fi elding more

* Excludes supply chain sales; sales represent nutrition. Supervalu currently conducts healthy than 2,100 (and growing) immunizing pharma- SUPERVALU fi scal year ended Feb. 26, 2011 eating tours, encompassing a number of such tar- cists and developing comprehensive and reim- Source: Company reports, DSN estimates geted conditions as diabetes and heart health. bursable MTM programs.

14 • MAY 2, 2011 DRUGSTORENEWS.COM Publix rolling with service advantage BY MICHAEL TROY macies and a steady stream of recognition. The company earned the distinction of being the A weak job market and enduring housing highest ranking supermarket in terms of cus- challenges in Florida weren’t enough to derail tomer service — for the 17th consecutive year the onward march of Publix last year as the — by the American Customer Satisfaction In- state’s leading supermarket chain expanded dex, a partnership between the University of its total store count, grew same-store sales and Michigan Business School, American Society ended the year with record results. for Quality and CFI Group consulting fi rm. The company’s formula for success remains “Offering premier customer service is stra- the now familiar combination of stellar cus- tegic to all of us. It’s what sets us apart from tomer service and top-notch store operations. our competition,” Publix president Todd And with these retail fundamentals form- Jones said. HQ: Lakeland, Fla. ing the core of its value proposition, Publix Happy employees are more likely to take 2010 sales: $25.1 billion doesn’t have to concern itself with being the better care of customers, and by all indications, % change vs. 2009: 3.3% PUBLIX lowest-priced operator in the market, as its Publix is a good place to work. The company is No. of stores: 1,033 core shoppers are willing to pay a little more 1-of-13 charter members of Fortune magazine’s No. of stores with Rx: 841 for a superior store experience and old-school “100 Best Companies to Work For” list, having Avg. store size: 46,563 sq. ft. service where employees bag groceries and made the cut since the list’s inception in 1998. Rx sales: $1.5 billion carry purchases to customers’ cars. Look for more of the same from the compa- Publix remains a case study that customer ny this year as the company expected to open % of sales from Rx: 6% service still matters and pharmacy plays a key 26 new stores, and with some cooperation Sales per store: $24.3 million role in meeting that customer expectation. from Florida’s economy, it could be looking at Source: Company reports and DSN estimates Publix ended last year with a total of 841 phar- an even better fi nancial performance. Costco focuses on Rx as U.S. sales soar BY ALARIC DEARMENT pharmacy retailing. “Costco continues to ex- pand physical infrastructure and continues Many analysts have voiced concern that to make improvements to the online ordering despite numerous indications of a slow, but experience for pharmacy customers,” Costco healthy, economic recovery in the United States, SVP pharmacy Vic Curtis told Drug Store News. growth in the number of jobs has lagged, even “With mail-order, specialty and retail business as it has exceeded economists’ expectations. growing nicely year over year, the further inte- But another indicator that the economy is gration of e-commerce solutions is important picking up speed is U.S. sales growth at Costco for Costco members.” Wholesale, the members-only mass merchan- Costco also has introduced such initiatives diser based in Issaquah, Wash. For fi scal 2010, as the Costco Member Prescription Program HQ: Issaquah, Wash. sales at the company’s 424 U.S. stores — which for uninsured Americans and the Costco Phar- 2010 sales: $59.6 billion* the company offi cially calls warehouses — were macy Benefi t Partnership, a prescription ben- % change vs. 2009: 5.5% $59.6 billion, compared with $56.5 billion in 2009. efi t program. In addition, the retailer has plans Most of the company’s sales come from its to introduce such services as refi ll reminders No. of stores: 424 famous bulk-sized packages of various con- and automatic refi lls. No. of stores with Rx: 419 sumer packaged goods and such products as “Even though we rate at or near the top in Avg. store size: 142,000 sq. ft. furniture and food. But prescriptions at the customer surveys, we think we can do even bet- Rx sales: $1.5 billion pharmacies still accounted for a steady percent- ter,” Curtis said. “This not only includes the in- % of sales from Rx: 2.5% age of sales, at $1.5 billion, while nonprescrip- warehouse experience, but also with regard to COSTCO Sales per store: $140.6 million tion pharmacy items, like over-the-counter making it easier to use Costco pharmacy online * U.S. stores only Source: Company reports drugs, had sales of $1.7 billion. refi lls [and] pickup in warehouse, status check The company also has ramped up online [and] pickup reminders.”

15 • MAY 2, 2011 DRUGSTORENEWS.COM Sam’s Club gunning for FDM market BY MIKE TROY members set foot in the building. The phar- macy is highly visible thanks to colorful over- Growing the health-and-wellness business re- head signs, while leading brands in all the mains a top priority for Sam’s Club as the ware- major drug store categories are merchandised house club operator has identifi ed those key cat- on what typically are four 50-ft.-long shelving egories as areas where it can demonstrate value, runs that lead to the pharmacy. drive member loyalty and gain market share. It’s a good look, and the business results are Sam’s has high expectations for health and there, according to the company. So Sam’s re- wellness, along with food and consumables, as it mains committed to a multiyear process that em- looks to deliver on its brand promise of “savings phasizes upgrading the existing club shopping made simple” and maintain the same-store sales experience rather than signifi cantly expanding momentum experienced throughout 2010 that beyond an existing base of 609 clubs. Sam’s Club HQ: Bentonville, Ark. SAM’S CLUB culminated with a 2.7% gain in the fourth quarter. will spend about $1 billion this year to remodel 2010 sales: $49.5 billion That means placing an increased empha- 60 to 70 clubs while opening, expanding or relo- % change vs. 2009: 3.4% sis on the presentation of health-and-wellness cating an additional seven to 12 units. No. of stores: 609 categories in clubs while adding new services, And as it places further emphasis on health No. of stores with Rx: 537 such as hearing centers, conducting monthly and wellness, it is conceivable the company health screenings and participating in exclu- could see more meaningful contribution from Avg. store size: 133,000 sq. ft. sive distribution agreements with such well- those categories. Last year, the health-and- Rx sales: $1.3 billion known brands as GNC. wellness categories — which Sam’s Club de- % of sales from Rx: 2.7% Looking at the company’s new and remod- fi nes as pharmacy, optical services and over- Sales per store: $81.3 million eled clubs, there is an unmistakable empha- the-counter drugs — accounted for 5% of sales, Source: Company reports, DSN estimates sis on health and wellness from the moment the same as the prior year. H-E-B adding clinics, new Rx services

BY JIM FREDERICK vaccinations and pet medicines, as well as free HQ: San Antonio health screenings and free prenatal vitamins. Last 2010 sales: $16 billion “After all, we’re from around here, too.” That summer, the company also extended its reach % change vs. 2009: 6.5% message, delivered to millions of Texas consumers electronically with the launch of an improved No. of stores: 330 via the pharmacy page on H-E-B’s heavily scanned website for prescription renewals and a new link No. of stores with Rx: approx. 210 website, lies at the heart of the San Antonio-based with customers’ mobile phones. Avg. store size: 65,000 sq. ft. supermarket chain’s seemingly unshakeable grip To ward off disease, the company’s pharmacies Rx sales: $1.2 billion on both customers and patients in the Lone Star and clinicians now offer periodic immunizations,

H-E-B % of sales from Rx: 7.4% State. The H.E. Butt Grocery Co. maintains high not only for fl u but also for hepatitis A and B, Sales per store: $48.5 million marks for customer loyalty, innovative patient care HPV/cervical cancer, measles, meningitis, pneu- services, a quality shopping experience and plenty monia, shingles and tetanus. That appeal to dis- Source: Company reports, DSN estimates of healthy choices in its food aisles. ease prevention has permeated the food aisles as H-E-B pharmacists now provide health well; H-E-B promotes healthier nutritional choices screenings for blood pressure, glucose and cho- with programs like its Fully Fit branding pro- lesterol every second Saturday of the month gram, which identifi es healthy foods throughout from March through October, as well as quarter- the store, and the H-E-Buddy campaign, designed ly A1C exams for patients with diabetes. Those to educate kids about healthier foods and snacks. patients also are eligible for a free InControl No In partnership with RediClinic, H-E-B aggres- Coding starter kit when they fi ll their fi rst script sively is expanding its network of in-store clinics. for a diabetes medication. RediClinic revealed last fall it will open another 20 H-E-B also builds loyalty with its Rx Rewards clinics in H-E-B stores this year, nearly doubling Platinum card. For a $5 enrollment fee, the card its presence within the Texas chain, with a focus provides discounts on some 500 generic drugs, on the Austin, Houston and San Antonio regions.

16 • MAY 2, 2011 DRUGSTORENEWS.COM Giant Eagle takes HBW to new heights BY MICHAEL JOHNSEN group is responsible for answering any food and nutrition questions that one of Giant Ea- You can’t be all things to all people, but gle’s 3.8 million Giant Eagle Advantage card- you can be all things to one person. That’s holders may have. the opportunity Giant Eagle is grabbing with In addition to boosting the mix of services the number of ways the Pittsburgh food-and- available at Giant Eagle these days, the grocer pharmacy retailer interacts with patients. also remains highly competitive on generic “Our goal is to help those within our com- medication offerings. “It is also important munities live healthier, longer lives,” Dan Don- that we continue to deliver great value to our ovan, Giant Eagle spokesman, told Drug Store customers, both with offerings, such as our $4

News. “We look to do this in a number of ways generic prescription program and our free an- GIANT EAGLE HQ: Pittsburgh … [through] initiatives, such as our health and tibiotic and diabetes medication initiatives, as beauty care business, in-store retail health clin- well as by offering popular Fuelperks! rewards 2010 sales: $8.6 billion ics and our group of skilled dietitians.” on many qualifying prescriptions,” Donovan % change vs. 2009: 4.9% Giant Eagle opened the fi rst of its health- said. In the summer of 2010, Giant Eagle be- No. of stores: 228 beauty-wellness pilot tests — a new wellness gan offering fi ve commonly prescribed medi- No. of stores with Rx: 213 format that helps bridge pharmacy and a more cations for the treatment of Type 2 diabetes — Avg. store size: 80,000 sq. ft. natural, wellness-oriented front-end — in 2009. glimepiride, glipizide, glyburide, metformin Rx sales: $1.1 billion That department, which boasts its own en- and chlorpropamide — at no cost to patients. % of sales from Rx: 13% trance and is opposite pharmacy, better posi- For that, the grocer was recognized by the Sales per store: $37.7 million tions the grocer as a preventive health resource. American Diabetes Association with that orga- Source: Company reports, Giant Eagle’s team of dietitians is headed nization’s Chairman’s Citation Award. Giant Pittsburgh Post-Gazette, DSN estimates by corporate nutritionist Judy Dodd — her Eagle is the second recipient of the award. MSI gives customers best of both worlds BY ALARIC DEARMENT needs of patients with such health conditions as diabetes by offering such services as diabetes Chain pharmacies and independent phar- care, home health care, durable medical equip- macies each have their advantages and disad- ment and immunizations. This, in turn, helps vantages. Chains generally follow a top-down franchisees drive more traffi c into their stores business model that requires all stores to be and diversify revenue streams beyond front- roughly identical in terms of their look and ser- end goods and fi lling scripts. Cardinal Health vices, but they can offer those services to cus- — which in November 2010 appointed John tomers around the country. Independents’ Fiacco as VP of Medicine Shoppe and Medicap services usually are limited to one or a hand- Pharmacy stores — is running a Specialized ful of locations in a single geographic area, Care Center for heart health as a pilot program HQ: Dublin, Ohio but they have more freedom in terms of their and plans to expand it later in the year. 2010 sales: $1.32 billion* mix of products and services. Combating prescription drug abuse is an- % change vs. 2009: -15.6% But what if a pharmacy could tap into the other area where Cardinal Health and MSI No. of stores: 658 advantages of chains and independents? That’s have focused attention, such as through Car- No. of stores with Rx: 658 the case at Medicine Shoppe International and dinal’s GenerationRx program. In March, the Avg. store size: 1,800 sq. ft. Medicap Pharmacy stores. Strictly speaking, Cardinal Health Foundation teamed up with Rx sales: $1.25 billion MSI, owned by Cardinal Health, isn’t a chain; the American Pharmacists Association to pro- it’s a franchising system that allows pharma- vide pharmacy students and educators, phar- % of sales from Rx: 95%* SHOPPE cists to operate their stores how they see fi t macists and other healthcare professionals MEDICINE Sales per store: $2 million while using a respected international brand. with tools and information to fi ght abuse of * U.S. stores only As one example, MSI has rapidly expanded prescription drugs in a partnership announced Source: DSN estimates its Specialized Care Centers, which address the at the APhA’s annual meeting in Seattle.

17 • MAY 2, 2011 DRUGSTORENEWS.COM Hy-Vee fi nds niche in Rx, healthy eating BY ALARIC DEARMENT called Hy-Vee Pharmacy Solutions, also has its headquarters in Omaha and offers phone ser- The typical fi rst-time customer walking into vice, personal care coordinators and the option a Hy-Vee store will probably see it as a super- of having specialty medications made available market, but what makes Hy-Vee stick out is its for pickup at a Hy-Vee pharmacy or delivered strong emphasis on pharmacy programs and to a patient’s home, offi ce or other location. health and wellness. Healthy eating is another area where Hy- In December 2010, the chain announced it Vee has staked out a niche for itself. It marked would become one of a number of retailers to February as American Heart Month with a participate in Pharmacy Saver, a new program special advertising circular that contained nu- offered in collaboration with UnitedHealthcare, trition information, shopping tips and heart- the country’s largest Medicare Part D insurer. healthy recipes from Hy-Vee chefs, created The program offers 366 commonly prescribed in coordination with the chain’s 150 retail di- generic drugs to select Medicare benefi ciaries etitians. The chain also began experimenting HQ: West Des Moines, Iowa for as little as $2 and is offered on top of Hy- with a healthy checkstand assortment it calls 2010 sales: $6.9 billion Vee’s generic discount program, which offers “Blue Zone Lanes” (see page 86). % change vs. 2009: 7.8% HY-VEE generic prescriptions for $4 for 30-day supplies Hy-Vee’s efforts have won it recognition No. of stores: 232 and $10 for 90-day supplies. from the Food Marketing Institute, which No. of stores with Rx: 229 Pharmacy Saver adds to Hy-Vee’s growing awarded the chain one of its 2010 Maximizing list of pharmacy offerings, including the chain’s People Potential awards at the FMI Human Avg. store size: 70,000 sq. ft. partnership with Omaha, Neb.-based specialty Resources/Training Development Conference Rx sales: $942 million pharmacy provider Amber Pharmacy to pro- in Baltimore in October in recognition for its % of sales from Rx: 13.7% vide services that also would take advantage of healthy lifestyle program, which encourages Sales per store: $29.7 million Hy-Vee’s diet and nutrition programs. The part- employees to manage their health and rewards Source: Company reports nership, offi cially a joint venture with Amber them for active participation. Albertsons reaches out to kids, diabetics BY ANTOINETTE ALEXANDER When parents enroll children in the program, each child receives a membership card and Health and wellness is a major focus for an activity sheet. There also is a newsletter grocer Albertsons, and that also holds true to help parents with advice on health top- for its youngest of customers. ics. Each month, members receive an email Enter Healthy Kidz Club. newsletter with tips, recipes and information. In the second half of 2010, the company an- The second page of the newsletter is for kids nounced the launch of the Healthy Kidz Club. and features activities and fun facts that will help them think about health in ways that speak to them. Parents also are encouraged HQ: Boise, Idaho to reach back to pharmacists via email with 2010 sales: $3.3 billion questions about youth-related health issues. % change vs. 2009: 6.8% In other health news, for those patients No. of stores: 216 with diabetes, the grocer is offering meter training and diabetes management classes in No. of stores with Rx: 205 most major markets. On the retailer’s web- Avg. store size: 55,000 sq. ft. site, there’s also an online Diabetes Health Rx sales: $787 million Center that houses information on foot care, % of sales from Rx: 24% hypoglycemia, high triglycerides and insulin Sales per store: $15.2 million resistance syndrome, among other diabetes- related topics. ALBERTSONS Source: DSN estimates 18 • MAY 2, 2011 DRUGSTORENEWS.COM Winn-Dixie renews ‘fresh & local’ appeal BY JIM FREDERICK comprise nearly 4,000 products and account for Led by VP pharmacy John Fegan, a veteran 23% of “all the brands we sell in dollar terms,” of Ahold USA, the pharmacy division has certi- If sports columnists covered Winn-Dixie, according to the company. fi ed all but a few of its 800 pharmacists to pro- their story line would read something like Most signifi cant, Winn-Dixie has remodeled vide immunizations and some 400 of them to this: The Jacksonville, Fla.-based retailer has roughly half its 484 supermarkets. Capping that offer medication therapy management. climbed back into the ring as a slimmed-down renovation effort was the unveiling last year of a “With the availability of generics and the prices and much-improved fi ghter competing in a dramatically improved store prototype in Mar- so low, it really comes down to the service ... and lighter weight class. gate, Fla., and Covington, La., that highlights the [the] comfort the [customer] gets from walking in The evidence is abundant that Winn-Dixie has company’s Fresh & Local market strategy. and talking with the pharmacist,” Fegan said. regained its balance. In fi scal 2010 — a year ham- Among recent innovations are a centralized mered by recession and slack sales — the chain HQ: Jacksonville, Fla. prescription record system, called WD RxCon- generated net earnings of $28.9 million, fi nished 2010 sales: $7.2 billion WINN-DIXIE nect, and an optional, automatic script- upgrading nearly half its store base, unveiled a refi ll program. % change vs. 2009: -1.6% dazzling new store prototype and poured $190 million into strategic improvements and the ex- No. of stores: 484 pansion of its “Fresh & Local” strategy. No. of stores with Rx: 379 Capping a long retrenchment, Winn-Dixie last Avg. store size: 47,000 sq. ft. year shed another 30 stores saddled with high Rx sales: $434 million* lease costs and other problems. To restore profi t- % of sales from Rx: 6%* ability, it focused on “adjusting our promotional Sales per store: $14.9 million practices,” in the words of chairman, president * Estimate; pharmacy, fuel and fl oral and CEO Peter Lynch, and on the rebranding combined contributed 10% to total sales and expansion of its private brands, which now Source: Company reports, DSN estimates Pharmacy, makeover lifts Fred’s sales BY MICHAEL JOHNSEN 17% increase in immunizations Fred’s realized in 2010 vs. 2009 because of H1N1. Fred’s last year migrated its more than 300 Fred’s also will continue to emphasize the bet- pharmacies to a more convenient front-of-store ter merchandising mixes to come out of its Core position in an effort to boost pharmacy revenue 5 program, which is designed to highlight fi ve — and it worked. Fred’s 2010 pharmacy sales strong trip-driving departments where Fred’s growth of 4.8% outpaced the discounter’s over- feels it has a marketable advantage over other all sales growth of 3% for the year. At the time small-box competitors — notably pharmacy, Fred’s began executing against the pharmacy celebration and party, pet products, paper and makeover, the company reported that test chemical, and home products. By the end of stores featuring front-of-store pharmacies en- 2010, Fred’s had roughly 30% of its store base in HQ: Memphis, Tenn. joyed 20% higher sales per square foot as com- the Core 5 layout, which features improved mer- pared with the company’s average. chandising, signage and adjacencies. 2010 sales: $1.8 billion Fred’s opened 21 new pharmacies through- And while Fred’s projects fl at comparable % change vs. 2009: 3.0% out fi scal 2010 and plans additional pharmacy pharmacy sales across 2011 because of the num- No. of stores: 677 location growth of between 10 and 15 in 2011. ber of branded pharmaceuticals losing patent No. of stores with Rx: 313 “Pharmacy expansion not only enhances mar- protection and pharmacy reimbursement pres- Avg. store size: 18,300 sq. ft. gins; it also serves as a proven driver of custom- sures on the average manufacturing price at Rx sales: $628 million er trips and loyalty,” Bruce Efi rd, Fred’s CEO, the state level, Efi rd tabbed pharmacy as a key told analysts in March. growth driver for Fred’s. “On average, stores FRED’S % of sales from Rx: 34.1% Sales per store: $2.7 million Fred’s pharmacy department also was suc- with pharmacies have higher front-end traffi c, cessful in administering 7% more immunizations consistently performing at 10% or better than Source: Company reports to patients in 2010 — that’s a build on top of the stores without pharmacies,” he said.

19 • MAY 2, 2011 DRUGSTORENEWS.COM Shopko’s ‘I-think-I-can’ attitude pays off BY ALARIC DEARMENT ko also offers fl u shots at all its pharma- cies and has 19 in-store Fast Care clinics. Shopko’s story is sort of like a retail- The company has made improvements ing version of “The Little Engine that in other areas as well. In March, it an- Could.” Among mass merchandise re- nounced a revamping of its e-commerce tailers, it’s one of the smaller and less site, featuring improved design and com- well-known chains, but that hasn’t patibility with traditional computers, stopped it from making its mark, partic- laptops, tablets and mo- ularly in new health-and-wellness and bile devices. pharmacy initiatives. For example, the company’s pur- chase of Health One’s Uvanta phar- HQ: Green Bay, Wis. 2010 sales: $2.01 billion macy division gives it an advantage SHOPKO in serving long-term care and nursing % change vs. 2009: 0.5% facilities for seniors. Meanwhile, it has No. of stores: 136 made headway in smaller, rural mar- No. of stores with Rx: 135 kets with Shopko Hometown stores. Avg. store size: 80,000 sq. ft. These include the new 36,000-sq.-ft. Rx sales: $591.8 million store in Seymour, Wis., which offers % of sales from Rx: 29% pharmacy services and a full eye-care Sales per store: $14.7 million center. The company plans to open eight more of the small-format stores Source: DSN estimates in summer and fall of this year. Shop- Rx focus pulls Kinney through recession

BY ANTOINETTE ALEXANDER tions, completed in 2010 the rollout of its new pharmacy system and, as a result, is now able While the economic downturn battered to offer new services such as ReadyScripts. retailers across all channels, new pharma- ReadyScripts is an automated refi ll program cy services and a new state-of-the-art phar- that is married with outbound messaging for macy system has helped regional player patient reminders and free prescription deliv- Kinney Drugs weather the storm. ery for those patients with little or no mobility. Kinney Drugs, which opened its fi rst Through a partnership with a central New store in 1903 and today operates 90 loca- York hospital, Kinney Drugs also is offering computer-assisted dispensing machines for the home setting and mobility chairs. HQ: Governeur, N.Y. Kinney Drugs previously had been pro- 2010 sales: $788.5 million viding vaccinations only at its Vermont lo- % change vs. 2009: 6% cations but, thanks to changes in New York No. of stores: 90 state regulations, the retailer is now offering No. of stores with Rx: 90 immunizations in its New York pharmacy locations as of mid-2010. Avg. store size: 11,550 sq. ft. Looking ahead, the company indi- Rx sales: $602.2 million cated that it is planning to grow its store % of sales from Rx: 76.4% base by 2% to 4% each year, and also is Sales per store: $8.76 million interested in acquiring independent op- Source: Company reports, DSN estimates erators to establish a customer base in KINNEY DRUGS new markets.

20 • MAY 2, 2011 DRUGSTORENEWS.COM A&P’s mobile, refi ll programs simplify Rx BY ANTOINETTE ALEXANDER A&P also now offers opt-in automatic refi lls rolled out a free prescription delivery service on maintenance prescriptions and, if patients are in all of its pharmacies. To boost customer A&P may be a supermarket chain, but judg- signed up for the email/text notifi cation service, loyalty and help patients save money, A&P ing by its string of new health-and-wellness they will be notifi ed when that refi ll is ready. also offers its Live Better! Wellness Club, initiatives and strong emphasis on pharmacy, “We found it is very good for adherence. which includes savings on generic drugs, one could argue that it really is a pharmacy [Going forward], we are looking at some oth- free prenatal and children’s prescription vi- with a grocery store wrapped around it. er adherence programs,” said VP pharmacy tamins, and discounts on pet prescriptions, Through A&P’s network of 200 pharmacies Robin Page, who noted that it was too early to among other savings. and 605 pharmacists, the company is aggres- provide details on future programs. sively looking for ways to improve the health A&P also is further expanding into immu- and well-being of its shoppers. And that in- nizations by certifying pharmacists, and has cludes improving medication adherence. To that end, the company recently launched a new opt-in email/text-message reminder HQ: Montvale, N.J. service. How it works: Patients can opt in to 2010 sales: $8 billion receive either an email or text notifying them % change vs. 2009: -9%

that their prescription, which they or their doc- No. of stores: 395 A&P tor have called in for refi ll, is ready for pickup. No. of stores with Rx: 200 If it isn’t picked up within three days, a re- Avg. store size: 42,000 sq. ft. minder email or text will be sent. Also, if there are no refi lls left on a prescription and the doc- Rx sales: $480 million tor hasn’t called back the pharmacy within a % of sales from Rx: 6% day, a notifi cation will be sent to the patient Sales per store: $20.2 million letting him or her know that the doctor has not Source: Company reports, DSN estimates yet returned the pharmacy’s call. ShopRite adds dietitians, mobile spaces

ShopRite is striving to help its shoppers live healthier lives, the grocer has, at select lo- with a nutrition professional to create custom- shop right by focusing on health and wellness cations, an on-site registered dietitian. ized meal plans. The dietitian can educate cus- and added convenience. To help customers Wakefern implemented the retail dietitian tomers on a number of issues, including how program in 2006, and today there are 20 retail to shop for healthy meals and proper nutrition dietitians working in 23 ShopRite locations. for specifi c medical conditions, and can sched- This free service offers customers the oppor- ule monthly screenings for specifi c health is- tunity to discuss their health and dietary needs sues, such as diabetes and high cholesterol. The dietitians are available to walk the aisles with customers for a personal touch, but there HQ: Keasbey, N.J. also are in-store shelf tags — e.g., gluten-free, 2010 sales: $11.8 billion organic, natural, fat-free, low-fat, sugar-free, re- % change vs. 2009: 0.9% duced sugar, no sugar added and low sodium — No. of stores: 232 to help customers navigate the aisles. No. of stores with Rx: 191 Online shoppers will fi nd weekly articles Avg. store size: 65,000 sq. ft. - and healthy “Right for Tonight” recipes that are 70,000 sq. ft posted by the corporate dietitian, and there’s also an Ask the Dietitian feature on the site to help Rx sales: $590 million educate consumers. In store, the grocer also of- % of sales from Rx: 5% SHOPRITE fers monthly screenings for specifi c health issues, Sales per store: $50.9 million such as glucose screenings during November Source: Company reports, DSN estimates and cholesterol screenings in September.

21 • MAY 2, 2011 DRUGSTORENEWS.COM Meijer disputes belief that nothing is free BY ALARIC DEARMENT offered include seasonal fl u, pneumococ- cal and shingles vaccines, all available on a The Midwest is known for fl at landscapes walk-up basis. and fertile farm fi elds stretching to the hori- The company, which currently has 195 zon, but it also is home to one of the coun- stores, plans to open two more in the fall try’s oldest and most successful mass mer- and has been expanding in Chicago with chandise chains — one with a long history small-format stores of 90,000 sq. ft. that are of strong emphasis on pharmacy programs. focused on grocery and pharmacy. Where a growing number of chains have adopted generic discount programs, Meijer has taken to giving many drugs HQ: Grand Rapids, Mich. 2010 sales: $14.5 billion away for free. The list of medications that MEIJER customers can obtain at no charge now % change vs. 2009: NA includes metformin for Type 2 diabetes, No. of stores: 195 prenatal vitamins and most antibiotics. No. of stores with Rx: 195 The chain also offers a variety of screen- Avg. store size: 205,000 sq. ft. ings for diabetes, cholesterol, liver func- Rx sales: $435 million tion and blood pressure, as well as pro- % of sales from Rx: 3% grams for combating obesity, such as body Sales per store: $74.4 million mass index and weight management in- Source: DSN estimates formation and education. Immunizations BioScrip unites community, specialty Rx As a specialty pharmacy provider, BioScrip the purchase of DS Pharmacy, the prescription service at MyBioScrip.com designed to connect probably isn’t the fi rst name that comes to mind drugs business of Drugstore.com, a deal that healthcare professionals, patients and caregivers when one hears “retail pharmacy,” but its net- also included an agreement whereby customers in order to help patients manage their medica- work of 31 community pharmacies around the could order prescription drugs from BioScrip tions and improve their overall care experience. country gives it a comfy spot at the table. The through the Drugstore.com website. In March, The site uses HealthyCircles, an online platform kinds of products and services it’s able to offer Walgreens purchased the remaining portions of that enables people to manage and share health — ranging from home infusion and treatments Drugstore.com for $429 million. information. “It’s time we created a patient- for complex, chronic disease states to over-the- In February, BioScrip launched a Web-based centric model in the specialty space, and BioScrip counter medications and sometimes even con- is proud to be the fi rst,” said Rick Smith, who re- sumables — as a result of its combination of placed Richard Friedman as CEO in January. HQ: Elmsford, N.Y. community pharmacy and specialty pharma- Perhaps not surprisingly, the company’s strat- cy make BioScrip stand out. 2010 sales: $1.6 billion egy and approach to pharmacy has earned it a In July 2010, it spent $10.5 million to close % change vs. 2009: 23% healthy amount of recognition. Last month, the No. of stores: 31 Washington-based healthcare accrediting organi- No. of stores with Rx: 31 zation URAC awarded BioScrip its specialty phar- Avg. store size: 2,621 sq. ft. macy and mail-service pharmacy accreditation. Rx sales: $1.3 billion* Gaining the accreditation required it to participate % of sales from Rx: 81% in a complex application process that included BIOSCRIP Sales per store: $11.6 million** comprehensive review of its customer service and clinical pharmacy processes against a combined * Refl ects revenues from community pharmacies, traditional and specialty pharmacy mail operations, prescription 146 quality standards by expert analysts. discount card programs and integrated PBM services In addition to its community pharmacies, Bio- ** Revenues per location for all 112 locations, including community pharmacies, infusion locations and Scrip operates 33 home nursing locations, 45 home mail-service facilities, based on Rx sales infusion locations, three mail-service facilities and Source: Company reports two contract-affi liated infusion pharmacies.

22 • MAY 2, 2011 DRUGSTORENEWS.COM USA Drug gets back in growth mode BY JIM FREDERICK ration in average prescription price, especially as a result of new-to-market generics.” But diabetic There’s nothing like a recession for focusing and Alzheimer’s medicines are continuing to drive merchants on what matters most. For USA Drug, sales, he added, and “we expect great prescription that meant concentrating on core markets, cutting comps,” as well as “an increase in comp OTC sales costs and recharging its image for down-home val- of 4% to 5% for the upcoming year,” he said. ue, neighborly service and a broadly merchandised front end focused on local consumer preferences. HQ: Pine Bluff, Ark. The company’s departure in March 2010 from 2010 sales: $650 million* USA DRUG Memphis, where it sold its Super D and Ike’s % change vs. 2009: -10.3%* stores to Walgreens, may have been the tonic the No. of stores: 140 company needed. USA Drug hit record profi ts in 2010, said president and CEO Joe Courtright, and No. of stores with Rx: 140 quickly returned to growth mode. “This year, we Avg. store size: 6,000 sq. ft. have a goal of 20 pharmacy acquisitions,” Cour- Rx sales: $390 million tright noted. Another goal for 2011: the conver- % of sales from Rx: 60% sion of all 140 stores to ComputerRx, a new phar- Sales per store: $11.8 million macy automation system. * Following sale of Memphis stores to Walgreens Like other pharmacies, USA Drug was snagged Source: DSN estimates last year by what Courtright called the “deterio- Kerr expands health focus beyond stores Kerr Drug describes its free prescription de- entities, the company has broadened its health livery service — launched in fall 2010 and re- focus well beyond the drug store setting. newed to positive customer response for 2011 Ten Kerr stores still feature “an expanded — as “old school innovation.” If “old school” clinical presence” ranging from “a clinical of- means anticipating consumers’ health and ev- fi ce that does screenings” to “a full Commu- eryday-product needs, and meeting them with nity Care Center,” Eliezer told Drug Store News. a down-home approach to store service and These days, however, the chain’s highly regard- a broader-than-usual menu of pharmacy care ed clinical pharmacy team is “out of the store as options, then the tag could apply to Kerr’s en- much or more than they’re in,” she said, as they tire business strategy. provide immunizations, health screenings and The chain has pruned its retail network to other services to business and community orga- a core group of 76 high-yield drug stores and nizations through Kerr Health. a number of clinical pharmacies, all in North “Originally, we thought there would be HQ: Raleigh, N.C. Carolina, as well as a combination specialty much more of a retail application with that, but 2010 sales: $570 million* pharmacy and mail-order center in its home it turns out that has not grown as quickly as % change vs. 2009: NA market of Raleigh. “We have fewer properties we’d hoped. But there’s a great deal of busi- No. of stores: 76 now, but all of them are excellent,” asserted Di- ness … out of the store, as well as [medication No. of stores with Rx: 76 ane Eliezer, Kerr’s director of marketing. therapy management] and immunizations in Avg. store size: 8,400 sq. ft. After developing a groundbreaking array of the store,” Eliezer explained. retail health services offered through a variety Meanwhile, the chain maintains its pioneer- Rx sales: $370 million of drug store formats, Kerr remains one of chain ing approach to community-based health care. % of sales from Rx: 65% pharmacy’s most innovative retail health pro- Kerr was the fi rst drug chain, for instance, to Sales per store: $6.5 million viders. With the launch last year of Kerr Health, launch ActiveCare’s ActiveOne PAL, or person-

KERR DRUG * Including sales through specialty, mail-order a separate division devoted to providing clini- al assistance link, a rapid-response system that and institutional/clinical pharmacies Source: DSN estimates cal pharmacy and wellness services directly to links seniors via a one-touch cell phone link to employers, long-term care facilities and other emergency health providers.

23 • MAY 2, 2011 DRUGSTORENEWS.COM Hannaford provides guiding star to health BY ANTOINETTE ALEXANDER MyHannaford.com, shoppers can make up to 10 personalized shopping lists, access their shop- Hannaford’s commitment to health and ping list from their smartphone and set prefer- wellness made headlines back in 2006 when ences for dietary restrictions. it implemented the innovative Guiding Stars The grocer also offers free nutrition classes system — the fi rst storewide nutrition navi- across New England, covering such topics as eat- gation system in the United States. Now, fi ve ing for healthy blood sugars and prenatal nutri- years later, the company’s dedication to healthy tion. Registered dietitians lead the classes, and living remains strong. free samples are given out at every class. Since the program’s launch, more fresh items Furthermore, in early 2010, Hannaford, and private-brand foods have been added to the which is owned by Belgium-based Delhaize HANNAFORD system. As of the end of 2009, there were more Group, became the fi rst grocer in the United HQ: Scarborough, Maine than 16,500 products that were “starred.” The star- States to introduce the ”Keep Local Farms” 2010 sales: $4.4 billion rating system rates food products and prepared initiative at all of its stores. The program is de- % change vs. 2009: 2.3% meals, and is now featured on shelf tags and in- signed to assist fundraising for local dairy farm- No. of stores: 177 store communication at the Hannaford, Food ers and to ensure a local fresh supply of milk. No. of stores with Rx: 136 Lion, Bloom and Sweetbay banners. Through li- Meanwhile, in addition to offering such Avg. store size: 34,000 sq. ft. censing, Hannaford introduced Guiding Stars to pharmacy services as free blood-pressure Rx sales: $396 million universities in New Hampshire and Maine and checks and free fl avoring of liquid medica- to a public school system in Maine where it tions, the grocery continues to offer its Healthy % of sales from Rx: 9% used it to star-rate prepared meals. Saver Plus program to help patients save mon- Sales per store: $27 million The retailer also is leveraging technology to ey on prescriptions, vision care, hearing aids, Source: DSN estimates help shoppers live healthier lives. By visiting certain diabetic supplies and more. Harris Teeter blends wellness, pharmacy BY JIM FREDERICK along with a new MedFlash program that pro- vides up-to-date, password-protected access to One way for a supermarket to convey its their prescription records. health-and-wellness commitment to customers is Harris Teeter also appeals to health-conscious to build a marketing campaign around it. consumers with big selections of organic foods, In Harris Teeter’s case, the campaign is “Your- an in-store Fishermans Market that promotes wellness.” Now in its sixth year, the initiative sustainable fi shing practices and partnerships offers “evidence-based guidance on important with local fi shermen, a Fresh Foods Market, its health issues” and help with nutritional choices own brand of Earth Wise wines and a range of throughout the store, according to the company. environmental initiatives under a program it Offerings include a Yourwellness e-newsletter, dubs My Earth that encompass everything from HQ: Matthews, N.C. interactive online applications and nutritional packaging reduction and recycling to cultivating 2010 sales: $4.1 billion tags on products throughout the stores, along locally grown and organic produce. % change vs. 2009: NA with advice from nutritional experts via online Based near Charlotte, N.C., Harris Teeter is No. of stores: 204 videos, blogs and e-newsletters. A membership steadily expanding its upscale store format. The No. of stores with Rx: 126 card offers discounts on such healthcare services chain passed a milestone in September with the Avg. store size: NA as eyeglasses, contact lenses, dental cleanings, X- opening of its 200th supermarket in Manassas, Rx sales: $285 million rays, fi llings, vitamins, hearing aids and diabetic Va. Since then, new units have sprouted in Wash- % of sales from Rx: 7.0% supplies, along with prescriptions. ington, D.C.; Norfolk, Va.; and in Wake Forest At the company’s more than 125 pharmacies, and Hampstead, N.C., bringing store count to Sales per store: $20.1 million customers can qualify for discounted fl u shots, 204 units in North and South Carolina, Virginia, Source: Company reports, DSN estimates $4 generics, an automatic refi ll program and Georgia, Tennessee, Florida, Maryland, Dela-

HARRIS TEETER a follow-up phone program by pharmacists, ware and the District of Columbia.

24 • MAY 2, 2011 DRUGSTORENEWS.COM Raley’s continues focus on patient care BY DOUG DESJARDINS for Diabetes, which was launched in late 2010 tients living with diabetes can receive enhanced with the University of California-San Francisco, support from their pharmacist,” said Raley’s VP Like most retailers in California, combo- insurer Blue Shield and members of the Cali- pharmacy and healthy lifestyles Flint Pendergraft. store pioneer Raley’s Supermarkets has been fornia Public Employees Retirement System, or Raley’s also recently launched its ReadyFill in a slow growth mode since the recession be- CalPERS. Under the program, CalPERs mem- program, which notifi es customers by phone gan in 2008. “We still have 105 pharmacies, so bers who have diabetes and fi ll their scripts at or email when a script refi ll is ready for pickup. not a lot has changed in the past few years,” Raley’s can have a one-on-one meeting with And its pharmacies offer vaccines for more said John Segale, a spokesman for the Sacra- their pharmacists to develop programs to better than a half-dozen diseases. mento-based chain. manage their blood-sugar levels. That’s the same number Raley’s had in 2008 “Through this unique partnership, more pa- when the recession began. Since then, Raley’s has added four supermarkets, raising its total HQ: Sacramento, Calif. store count from 129 to 133 that operate under

four banners, comprising Raley’s (85), Bel-Air 2010 sales: $3.2 billion RALEY’S (22), Nob Hill (21) and Food Source (5). Food % change vs. 2009: NA Source is a warehouse-format chain it launched No. of stores: 133 in 1994, while Bel-Air and Nob Hill are small No. of stores with Rx: 105 chains it acquired in the 1990s. Avg. store size: 50,000 sq. ft. Though the pharmacy division hasn’t added Rx sales: $288 million new stores, it’s continued to build an already % of sales from Rx: 9% strong slate of educational events, health screen- Sales per store: $24.1 million ings and special programs for customers. Ral- Source: Hoovers, DSN estimates ey’s newest program is called Pharmacist Care Brookshire Rx offers competitive pricing

BY AMANDA BALTAZAR In 2009, Brookshire started offering a wider selection of health-and-beauty products and es- The brand-new Fresh Health Prescription tablished sections devoted to diabetes, sleep and Plan from Brookshire Grocery was rolled out on therapeutic aids and supplies in a remodeled Su- March 10. It’s a comprehensive prescription plan per 1 Foods store in Lafayette, La. that shoppers in the chain’s new Fresh by Brook- The program’s success has been average, shire’s store, which opened in March 2010, can Cousineau said. However, components of the purchase for a $10 membership fee. program were expanded to another store, in Den- “The program covers generic and brand pre- ton, Texas, where it seems to be doing better, “so scriptions at very competitive pricing compared we may be able to have a better barometer based to what they’d pay with insurance and third- on this store,” he explained. If it continues to go party plans,” said Jim Cousineau, Brookshire well, the program may be extended, though he HQ: Tyler, Texas SVP pharmacy operations. added, “I don’t know that we ever see it as a real 2010 sales: $2.2 billion “It’s for shoppers who don’t have insurance or bastion of business for us.” % change vs. 2009: 3.8% third-party plans. We thought the Fresh banner What has been a success from day one are di- No. of stores: 155 gave us the opportunity to market and test this agnostic services in four of Brookshire’s stores. No. of stores with Rx: 113 with a little bit different clientele, and then deter- These include such screenings as blood glucose Avg. store size: 40,000 sq. ft. mine whether or not this is something we could and body mass index. That program is being ex- Rx sales: $308 million expand to our other banners,” Cousineau said. panded, as is an immunization program that has % of sales from Rx: 14% Also at this 55,000-sq.-ft. store is an in-depth nu- recently grown to cover travel vaccines and other GROCERY Sales per store: $14.2 million tritional center. The goal, Cousineau explained, is offerings, such as the pneumococcal vaccine.

BROOKSHIRE Source: Company reports, DSN estimates to fuse the pharmacy, grocery and nutritional cen- Brookshire also has a free antibiotic program ter as a combined health-and-wellness initiative. and discounted generics program.

25 • MAY 2, 2011 DRUGSTORENEWS.COM Thrifty White upgrades remote pharmacy BY DAWN WILENSKY moving into its territory. After about fi ve de- cades, the chain closed its store in Hastings, A new partnership with Gold Standard/ Minn., and sold it to Walgreens, which had Elsevier has solidifi ed Thrifty White Phar- opened a store just a block away. Walgreens also macy’s efforts to bring big-city services to its bought another of its stores in Mound, Minn. small-town customer base, which is spread Closing stores is not a usual practice for the across fi ve states: Minnesota, Wisconsin, North chain, which opened four stores, including Dakota, Iowa and Montana. moving into a vacant Wolff Drug location in The Maple Grove, Minn.-based chain of 84 Pierz, Minn., over the past six months. stores recently licensed Alchemy, a new drug In addition to its core employee-owned database and decision support solution, for all stores, the company also serves a growing of its pharmacy and telepharmacy dispensing cadre of independent retailers, currently num- systems. The new partnership will enable the bering 63 stores, including 12 Dahl’s and six HQ: Maple Grove, Minn. chain to streamline its prescription fi lling pro- Witt Pharmacies. 2010 sales: $302 million cess and provide drug information to pharma- Looking to differentiate itself from the com- THRIFTY cists instantly. petition, the chain has successfully partnered % change vs. 2009: -5% WHITE “Thrifty White is committed to providing with the College of Pharmacy at North Dakota No. of stores: 84 health care to populations where access to State University and its pharmacy students. No. of stores with Rx: 84 pharmacy services is limited. We believe that The pair opened the Thrifty White Concept Avg. store size: 4,500 sq. ft. the pharmacist is a great resource, especially Pharmacy, which emphasizes a retail commu- Rx sales: $274.8 million to patients in rural communities,” said Gary nity pharmacy practice. % of sales from Rx: 91% Boehler, EVP pharmacy for Thrifty White. Another area that the small regional has Sales per store: $3.6 million The move comes as the chain faces increased been on the leading edge in is the infusion Source: DSN estimates pressure from big-box stores that have been business it operates out of a central location. Indie pharmacy capitalizes on D.C. area BY MICHAEL JOHNSEN pharmacy,” said Michael Wysong, Care CEO, whose offi ce resides in the same Most Care Pharmacies are located building as the National Community within and around the nation’s capital, Pharmacists Association. “We [also] co- and that suggests Care represents the market a [quality assurance] manual face of pharmacy for a lot of infl uential with NCPA. That’s a perfect example Beltway executives. where we’re working hand in hand.” “[That proximity] really is an oppor- One of Care’s signifi cant points of tunity for us to represent independent differentiation is specialty pharmacy. Care has been the exclusive admin- istrator of the Washington DC AIDS HQ: Alexandria, Va. Drug Assistance Program contract for 2010 sales: $256 million the past eight years running. In addi- % change vs. 2009: 19.1% tion, many of Care’s pharmacies pur- No. of stores: 53 sue various specialty pharmacy disci- No. of stores with Rx: 53 plines — some of the largest fertility Avg. store size: 3,500 sq. ft. pharmacies in the country operate Rx sales: $243.2 million under the Care banner, for example.

CARE Care is a member-owned con- % of sales from Rx: 95% glomerate that successfully has tar- Sales per store: $4.8 million geted purchasing volume increases Source: Company reports 30% or more each year.

26 • MAY 2, 2011 DRUGSTORENEWS.COM Sav-Mor promotes its small-town spirit BY DAWN WILENSKY Its rewards program continues strong, of- is fi lled with valuable information with sections fering customers a 30-day supply of more than devoted to medicine safety, beauty, vitamin and Armed with the positioning line, “It’s Time 300 drugs for $4 and a 90-day supply for $11.99. nutrition tips and news, as well as a health library To Get Better,” Sav-Mor Drug Stores continues In addition, pharmacists offer one-on-one free with links to up-to-date information on drugs, to emphasize the big difference between its net- medication reviews, as well as a 20% discount on diseases and health news. work of franchised locations and the corporate all Quality Care over-the-counter products. The mentality of the chain operations. program was created three years ago for several To that end, its most recent radio and tele- reasons. “We put a value on working with our vision campaign positioned the pharmacies pharmacists to help manage prescription costs,” against the large national chains. The customer- Sav-Mor president Richard Grossman told Drug service-focused campaign established the Sav- Store News. In addition, it enables the chain to Mor pharmacist as “your personal pharmacist” match big-box retailers’ prices and keep custom- along with the idea that “nobody cares more for ers loyal to Sav-Mor pharmacies. The program the customer than the owner.” still carries a one-time fee of $10. To keep its stores in the public eye, Sav-Mor Have a question? A comprehensive website has diligently supported on-target market- ing, aggressive advertising, traffi c building HQ: Novi, Mich. promotions and public relations campaigns. 2010 sales: $345.6 million SAV-MOR Among its most successful is the Advertising % change vs. 2009: -5.3% Circular campaign, whereby the pharmacies No. of stores: 72 produce 14 direct-mail tab and coupon books a year. While each store controls local delivery, No. of stores with Rx: 72 each is able to tap into an advertising and pro- Avg. store size: 1,500 sq. ft. motions program that would be out of reach to Rx sales: $286.8 million an independent pharmacy. Other initiatives cre- % of sales from Rx: 83% ated to assist its independently owned and op- Sales per store: $4.8 million

erated neighborhood pharmacies are improved Source: DSN estimates store-level effi ciencies. DDM refi nes service with DME, generics BY MICHAEL JOHNSEN comprehensive pharmacy point of care. tation of the pharmacy-focused marketing, “We are really marketing pharmacy more and a $1.99 generic drug program covering 50 The pharmacies of tomorrow are expected now than we have in the past,” noted Tom Mc- generics, Discount Drug Mart has been realiz- to be more service-oriented, and Discount Connell, Discount Drug Mart VP and CFO. For ing comparable-prescription gains, he said. Drug Mart is preparing to be exactly that: a every month since an October 2010 implemen- The regional operator has had an extensive durable medical equipment position since 2007, and that department has been expanded HQ: Medina, Ohio further to incorporate breast cancer products. 2010 sales: $536 million “We have a separate department within home % change vs. 2009: 1% health care that deals with counseling [breast No. of stores: 70 cancer patients],” McConnell said. No. of stores with Rx: 70 Expanding retail clinic offerings is another Avg. store size: 25,000 sq. ft. initiative around which Discount Drug Mart Rx sales: $235.8 million is focused. In a partnership with the hospital % of sales from Rx: 44% network Parma Community General Hospi-

DISCOUNT Sales per store: $7.7 million tal, the retailer has three retail clinics up and

DRUG MART running now, with two to three more slated to Source: Company reports, DSN estimates open later this year.

27 • MAY 2, 2011 DRUGSTORENEWS.COM Save Mart promises fast, affordable Rx BY DOUG DESJARDINS return to pick it up. “It’s another program that creates more value The 59-year-old Save Mart supermarket chain for our customers and lets them know we care more than doubled its store count in 2007 with about customer service,” said Robert Vaughan, the purchase of 132 Albertsons stores, but entered Save Mart’s senior director of pharmacy opera- something of a dormant period since then. Save tions. “We know our customers’ time is valu- Mart now operates 241 stores in California and able, and we stand behind that commitment.” Nevada, down from a peak of 255 in 2009, and Before launching the program, all Save 114 in-store pharmacies, down from 115 in 2009. Mart stores were integrated on a common But despite the recession-induced lull in software platform, and some higher-volume growth, it continues to launch innovative new stores implemented robotic fi lling systems. programs, such as the “19-minute promise.” The For cost-conscious shoppers, Save Mart has HQ: Modesto, Calif. SAVE MART unique program gives customers who have to its own Top Care private-label brand of over- 2010 sales: $4.7 billion wait longer than 19 minutes for a prescription to the-counter products at prices lower than most % change vs. 2009: -1% be fi lled a free “dinner and a movie” in the form a name brands. Pharmacies also accept prescrip- No. of stores: 241 $10 gift card for a food purchase and a free movie tion assistance program cards, including the No. of stores with Rx: 114 coupon for DVD rentals at its Redbox kiosks. Nevada Drug Card and the California Rx card, Avg. store size: 60,000 sq. ft. Save Mart said the offer is designed to show which provide discounts to customers during Rx sales: $232.6 million that its pharmacies “are faster than some of hard economic times. And Save Mart publishes % of sales from Rx: 4.9% our competition” and can have a prescription a free quarterly magazine called In Good Health Sales per store: $19.7 million fi lled in the time it takes for a customer to drop that offers customers helpful hints on maintain- Source: DSN estimates off their prescription, do their shopping and ing a healthy lifestyle. Weis immunization, MTM efforts pay off BY MICHAEL JOHNSEN connection between wellness and pharmacy ear- lier this year with an organizational restructure Pharmacy sales at Weis Markets increased 2.2% that folds Weis Lifestyle Initiatives department, in 2010 vs. 2009 thanks in part to strong cough- led by registered nutritionist Karen Buch, into the cold sales over the year and the expansion of its grocer’s pharmacy division. Buch now reports to pharmacy-based immunization program to most Maltese. “There’s an opportunity for us to lever- stores; Weis currently boasts 180 pharmacists who age both of those healthcare professionals, [the are certifi ed by their respective boards of phar- registered dietitian and pharmacist,] under one macy to administer vaccines, the grocer reported. department,” Maltese said. There are plenty of “Our goal is by this fall to have every pharma- opportunities to bridge nutrition and pharmacy, cist certifi ed to immunize,” Jeff Maltese, Weis VP Maltese said, particularly for consumers with pre- pharmacy, told Drug Store News earlier this year. existing chronic illnesses, such as diabetes and HQ: Sunbury, Pa. Medication therapy management is another focus heart health issues. There’s also signifi cant oppor- 2010 sales: $2.6 billion Weis will be pursuing for this fall, Maltese add- tunity to develop prevention-minded programs % change vs. 2009: 4% ed, where every Weis pharmacist will be trained for those health-savvy consumers, Maltese added. No. of stores: 164 to conduct an MTM consultation. The new Weis The change could bring a more clinical vibe Market prototype, updated last year, features a to Weis’ Healthy Bites publication, a free monthly No. of stores with Rx: 128 redesigned pharmacy that includes a dedicated magazine and social media directive that has Avg. store size: 48,000 sq. ft. consultation room where Weis pharmacists can historically featured health suggestions and Rx sales: $233 million WEIS consult with patients around their drug regimens better-for-you recipes published by Weis’ Life- % of sales from Rx: 8.9% and administer vaccination shots. style Initiatives team. “We’re also going to lever-

MARKETS Sales per store: $16 million To help capitalize on that pharmacy growth, age [Buch’s] knowledge to educate pharmacists Source: Company reports as well as to help bring together pharmacy and about how better to speak to their dietary consid- food, Weis Markets streamlined its internal erations for their disease,” Maltese suggested.

28 • MAY 2, 2011 DRUGSTORENEWS.COM K-VA-T’s holistic method fuses health, Rx BY AMANDA BALTAZAR nurse whose title is director of healthy initiatives, both of whom were hired with the goal of help- Offering a holistic approach to health is the ing customers live a healthy lifestyle. Both have goal of K-VA-T Food City stores, integrating worked very closely with the NuVal system, as pharmacy, food and good living. well as with local doctors and health centers. To this end, last spring the chain launched “We want our customers to be healthy because NuVal, a nutritional scoring system that helps healthy people live longer, and they’ll shop our consumers make better food choices. The system stores for more time. We recognize that as a [cor- was launched in all stores, and according to Don porate] citizen, we want to be the destination that Clark, VP pharmacy services, it’s doing very well. people seek out, understanding that when they go “We feel a responsibility to the people who to Food City, we have alternatives that will help shop in our stores and eat the products they buy them live a healthy lifestyle,” Clark pointed out. HQ: Abingdon, Texas from us,” Clark said. “We felt NuVal made it easy Every one of Food City’s pharmacies also has a 2010 sales: $2 billion for the customers to understand the nutritional pharmacist who is registered to provide immuni- % change vs. 2009: NA K-VA-T content of the foods they eat.” zations — anything from shingles to tetanus and No. of stores: 106 The pharmacy also is a vital part of Food City’s fl u vaccines — throughout the year. No. of stores with Rx: 76 health-and-wellness plans, Clark said. Customers of Food City’s pharmacies can join “Our pharmacist is always in our stores ready a prescription discount club that offers $4 gener- Avg. store size: 42,000 sq. ft. to answer questions on healthy living plans and ics and discounts on around 5,000 drugs. It also Rx sales: $200 million helping patients with information not only on allows customers to earn discounts on over-the- % of sales from Rx: 10% their medications, but also on the way they live counter medications on select diabetic products. Sales per store: $18.9 million and eat,” Clark explained. “It’s a real saver for people that don’t have insur- Source: DSN estimates Food City also has a registered dietitian and a ance or are underinsured,” Clark said. Schnucks tackles chronic conditions On top of its 101 in-store pharmacies, manage their condition, drugs, insurance, etc.” Schnucks last year opened four specialty phar- Free home delivery and refill-reminder macies, offering specialized services to patients. phone calls are two other services the special- The pharmacies offer services for pa- ty pharmacies provide. In Schnucks regular tients living with such chronic conditions as pharmacies, the chain continues its successful HIV, cancer, multiple sclerosis and autoim- programs of $4 generic drugs and free antibi- mune diseases, as well as for people recov- otics and prenatal vitamins. Immunizations ering from organ transplants, said company also draw customers. spokesman Paul Simon. “It’s for patients who Within the regular pharmacies, Schnucks require special attention and hard-to-source offers diabetes education through its certi- medication,” he added. fi ed diabetes educator pharmacists. As word HQ: St. Louis Of the four specialty pharmacies, two are spreads, more diabetes patients are taking ad- within Schnucks stores, beside the regu- vantage of this program, Simon pointed out. 2010 sales: $2.5 billion lar pharmacy, and two are stand-alone stores Another service the pharmacies offer is a % change vs. 2009: 0% in medical offi ces. The stores have been in- vision-screening test. “It’s no substitution for No. of stores: 105 troduced over the past two years, and more a trip to the eye doctor, but it’s a good indica- No. of stores with Rx: 101 could be introduced going forward. tion if there should be a trip to the eye doctor Avg. store size: 58,000-63,000 sq. ft. The specialty pharmacies run largely by — and it’s free,” Simon said. The stores also Rx sales: $205 million appointment because these patients typically provide information on local eye doctors for % of sales from Rx: 8.2% need a lot of counseling and one-on-one ser- patients who need it. Sales per store: $23.8 million vices. “The goal is to make life a little bit easier And fi nally, the Schnucks stores are a hub SCHNUCKS Source: Company reports, DSN estimates for the patient,” Simon explained, “with lots of for a twice-weekly mammography van run by counseling, advice [and] information on how to Barnes-Jewish Hospital.

29 • MAY 2, 2011 DRUGSTORENEWS.COM Bartell benefi ts from HBW HQ: Seattle 2010 sales: $366 million BARTELL Y LARIC E RMENT B A D A DRUGS Vaccinations have featured prominently in the % change vs. 2009: 3.5% chain’s business as well, with in-store fl u vaccina- No. of stores: 59 Bartell Drugs, a family-owned regional tions and corporate fl u clinics for area businesses, No. of stores with Rx: 59 chain since 1890, has still got it. The chain has as well as international travel clinics at 10 stores. Avg. store size: 15,000 sq. ft. brought together health and personal care by In December 2010, the company donated 4,000 sponsoring health and beauty events, the fi rst fl u vaccine doses to support pharmacy outreach Rx sales: $194 million of which happened in October 2010 and fea- programs at the University of Washington and % of sales from Rx: 53% tured health screenings, cosmetic demonstra- Washington State University, in Pullman, Wash., Sales per store: $6.2 million tions and hairstyling tips. Another event is providing vaccinations to nonprofi t groups and Source: DSN estimates scheduled for the fall. Native American tribal communities.

HQ: Cleveland Marc’s aims for low prices 2010 sales: $1.05 billion GLASSMAN % change vs. 2009: 5% BY JIM FREDERICK store Xpect in Connecticut — doesn’t hesitate No. of stores: 65 MARC to buy multi-truckload quantities of deal and No. of stores with Rx: 52 Cleveland, Ohio-based Marc’s will sell almost closeout merchandise to lock in a low price. Avg. store size: 40,000 sq. ft. - anything, provided it can price the item low and “With 60 stores, we have well over 1 million 50,000 sq. ft. turn it quickly. But it won’t sell shrunken heads. sq. ft. of warehouse, just to … bring stuff in,” “We went to one customs auction a while ago Glassman said. “Some stuff we bring in six to Rx sales: $150 million and bought some artifacts,” said company founder eight months before the season, but if you’re % of sales from Rx: 14% Marc Glassman in a recent YouTube video. “Then buying closeouts — especially seasonal close- Sales per store: $16 million we found out we’d bought some real shrunken outs — you have to buy when it’s there.” Source: DSN estimates heads from Peru. We were quite embarrassed.” “We just want to turn products fast at the Heads aside, Glassman’s eccentric, eclectic lowest prices,” Glassman said. “Literally no one than 400 generic drugs and everyday low prices retail brainchild is thriving — in part by defying in the country marks closeouts as low as we do.” on diabetic supplies, blood-pressure monitors, retail norms. In an era of just-in-time logistics, the The discounts extend to the chain’s more than digital thermometers, reading glasses, dietary 60-store Marc’s chain — Glassman also owns fi ve- 50 pharmacies, with a $3.99 price point on more supplements and more.

HQ: Miami

2010 sales: $319.6 million* NAVARRO Navarro refi nes shopability % change vs. 2009: 1.7%* BY ANTOINETTE ALEXANDER looks to open as many as 21 new stores over the No. of stores: 28** next three years. No. of stores with Rx: 27** Navarro Discount Pharmacy, the largest “2010 was a very exciting year for our company Avg. store size: 16,924 sq. ft. Hispanic-owned pharmacy retailer in the United in terms of really being able to set the strategy and Rx sales: $113.7 million States is celebrating its 50th anniversary this year. beginning to execute on the strategy in terms of % of sales from Rx: 36% And it is on an aggressive growth track as it en- our growth plans, and even some of the key ini- Sales per store: $11.4 million hances its service offerings and tiatives we rolled out in store,” said Cristy Leon- Rivero, VP marketing. “We remodeled and came * Navarro changed from a calendar year to a retail fi scal year. Rivero, VP marketing. “We remodeled and came ** Includes one small non-Rx location at Miami International Airport up with a ‘model service store’ within the year.” Source: Company reports While many of the services — such as a pe- diatric pharmacy window for busy parents, in- This store, as well as a few others, also includes store health events and free prescription delivery the chain’s new “structured function” model, — are available in other store locations, the mod- which organizes over-the-counter products by el customer service store brings together under health state, versus by brand, to ease category one roof the ultimate in customer service. This shopability. The redesign includes brand line ex- 24-hour test store, which is located on Sunset tensions and a broadened assortment, plus 6 ft. of Drive in Miami, opened in mid-2010. additional shelf space for children’s needs.

30 • MAY 2, 2011 DRUGSTORENEWS.COM HQ: Point Pleasant, W.Va. Fruth reforms small-town Rx 2010 sales: $134 million % change vs. 2009: 0% FRUTH BY ANTOINETTE ALEXANDER their pharmacist, and their comments are fea- No. of stores: 25 tured in print ads and online. So far, the com- No. of stores with Rx: 25 Regional player Fruth Pharmacy is re- pany has received as many as 500 responses. Avg. store size: 10,000 sq. ft. energizing its business. “We are entering our With regard to pharmacy services, the compa- 59th year of business and trying to continue to ny is improving medication adherence among Rx sales: $111 million provide that small-town, quality customer ser- patients, offering medication therapy manage- % of sales from Rx: 83% vice while staying competitive and on the cut- ment via a shared faculty arrangement with Sales per store: $5.4 million ting edge with all of the programs that are out West Virginia University, helping patients Source: Company reports there on the pharmacy side,” said Lynne Fruth, make lifestyle changes and successfully im- chairman and newly appointed Fruth president. prove their health via a cardiovascular well- program to an “immunize anytime” concept Fruth started a campaign in February where- ness program, and making a transition from that likely will feature expanded offerings, by patients write in to share why they value a nursing- and clinic-driven immunization explained Craig Kimble, director of pharmacy.

HQ: Sioux Falls, S.D. LEWIS DRUG Lewis overhaul plays up Rx 2010 sales: $145 million Lewis Drug has a new face, which not only Those who have visited the newly opened % change vs. 2009: 2% places a greater emphasis on the front end, but store on Louise Avenue in Sioux Falls, S.D., un- No. of stores: 32 also boasts a larger, revamped pharmacy. doubtedly will see the Lewis Drug store of the No. of stores with Rx: 31 future, president and CEO Mark Griffi n told Avg. store size: 40,000 sq. ft.; Drug Store News in a recent interview. 5,000 sq. ft. The pharmacy area is about one-third larger Rx sales: $80 million than a typical Lewis Drug pharmacy and has % of sales from Rx: 55% been revamped. “Call it the new face of Lewis Sales per store: $4.8 million Drug. It incorporates an upscale environment, Source: Company reports the beauty boutique, plank fl ooring in the pharmacy and an entertainment area in the pharmacy for waiting with fl at-screen TVs and In addition, Lewis Drug has expanded its refreshments,” Griffi n said. This new store also grocery departments in about a dozen loca- includes a “four seasons department,” which tions. In its larger stores, about 2,000 sq. ft. to is a 4,000-sq.-ft. environmentally controlled 3,000 sq. ft. have been dedicated to grocery room that can be used for various purposes items with a concentration on snack foods, throughout the year. grab-and-go items and frozen foods.

HQ: Boulder, Colo. PHARMACA Pharmaca picks up the pace 2010 sales: $88 million BY MICHAEL JOHNSEN lif., which features expanded facings in such % change vs. 2009: 9% categories as “rest and relaxation,” health No. of stores: 23 Pharmaca Integrative Pharmacy is target- monitoring and beverages, a category that in- No. of stores with Rx: 23 ing three new store openings in 2011 and cludes the fast-growing probiotic niche. Avg. store size: 4,200 sq. ft. between three and six new stores each year Pharmaca also recently revamped its e- Rx sales: $48 million through 2015. It’s a pace that would put the commerce site, a factor that should drive rev- % of sales from Rx: 54.5% company at approximately 44 locations in enue growth through 2011. The site showcases Sales per store: $3.8 million time for the chain’s 15th anniversary, Mark more than 4,500 products ranging from vita- Source: DSN estimates Panzer, Pharmaca president and CEO, recent- mins, supplements and herbs to personal care ly told Drug Store News. items, eco-home products and beauty essentials In November 2010, Pharmaca opened the in hard-to-fi nd brands. “We’ve got product that should be able to compete with the [specialty doors to its new prototype in Menlo Park, Ca- is high-value, low-cube and easy to ship that vitamin chains] on e-commerce,” Panzer said.

31 • MAY 2, 2011 DRUGSTORENEWS.COM