006_drsn_01_19_09.indd 1/13/09 3:23 PM Page 14 Regionals use innovation to knock out the competition BY ANTOINETTE ALEXANDER have become among the latest to offer a discount This regional player prides itself in customer serv- generic drug program. By offering such pro- ice, and, for the past seven or so years, has served o what do boxing and retail pharmacy have grams, these retailers can better compete with those patients in very small communities via a in common? More than you might think. such big players as Walmart. telepharmacy program. SLike boxers in the ring, both regional and South Dakota’s hometown drug store Lewis In an effort to ward off competition, Kinney national players are battling for the win and striv- Drug continues to grow its concept, even after 65 Drugs reportedly negotiated deed restrictions ing to overcome much of the same challenges, years in business, and has finalized plans to open a with St. Lawrence University on two properties — whether it is an uppercut from average wholesale full-service pharmacy this summer inside the near the SLU golf course at routes 68 and 11 — price, a jab from patients coping with rising phar- Sunshine Foods store in Tea, S.D. that will prevent for 50 years a store that sells pre- macy premiums and co-pays, or a counterpunch Meanwhile, the new management team at the scriptions. Walgreens and Rite Aid reportedly had from the rival down the street. But despite the helm of New York’s Duane Reade is testing new an interest in opening stores in those areas. challenges and added pressure from retail heavy- ideas — such as a raised pharmacy and improved These are just a few examples of how regional weights, regional players refuse to get pinned adjacencies — for store layout and design in vari- pharmacy chains are remaining competitive. against the ropes. ous locations throughout the city. While their service offerings and approaches may Unlike many of the large pharmacy retailers Pharmaca Integrative Pharmacy, whose focus vary, a common thread running throughout these that must wade through layers of management on both allopathic and holistic health remedies regional players is their commitment to, and deep and tread cautiously as to appease Wall Street, sets it apart from the competition, not only has entrenchment in, the communities they serve. these lightweights have speed and agility on their tapped supermarket and drug store pharmacy Many of these companies have been serving their side, and they are taking innovative measures to veteran Mark Panzer to serve as COO, but also patients for generations — 118 years if you are maintain their footing. has nearly doubled in size in the past year. With Bartell Drugs — and they have become not just a For example, Drug Fair, a regional with 59 phar- the help of a $20 million injection in the arm, local drug store on the corner, but also a friend. macies and general merchandise stores in north- Pharmaca now stands at 23 locations. In fact, many would argue that these light- ern and central New Jersey, and Discount Drug Then there’s Thrifty White, an 86-store chain weights are the true heavyweights in the commu- Mart, which operates 67 stores throughout Ohio, that serves rural areas and towns in the Midwest. nities they serve — a knockout champion. New exec team poised to overhaul Duane Reade ops NEW YORK — Since taking the helm at Duane Reade in Drug Store executive Frank Scorpiniti to serve as development in 2009. March 2008, John Lederer and his team have been SVP of pharmacy operations. He succeeded Jerry In one Upper East Side location recently visited by reviewing the business and pouring over customer Ray who resigned in September 2008. Drug Store News, many of these new ideas were evi- research to uncover opportunities to strengthen the Meanwhile, the management team is focusing on dent. For example, the pharmacy department is locat- business and capitalize on the chain’s brand and three primary areas: pharmacy, customer experi- ed near the front entrance and is elevated so it over- urban market niche. The 245-store chain also has ence and developing an “urban-centric” box. In looks the rest of the store. It also features hardwood retooled the management team. pharmacy, the company is exploring ways to floors for a high-end look and feel. Throughout the In the second half of 2008, the company hired upgrade its technology through added Web-based front-end, the aisles are wider, the lighting is brighter Joseph Magnacca, who previously led marketing applications and other efficiencies in the supply and some of the areas have been remerchandised for and merchandising initiatives at Shoppers Drug chain and pharmacy customer service. better adjacencies. For example, the acne skin care Mart since 2002, as SVP and chief merchandising To improve the customer experience, focus is on treatments are merchandised next to the skin care officer. Magnacca filled a post that had been vacant enhanced employee training and on strengthening boutique. The store also features a grocery-style since the April departure of David D’Arezzo. ways to measure customer satisfaction. checkout area and modern-looking signage. Joining the company as SVP of supply chain was In addition to these initiatives, the company is DUANE READE Mark Scharbo. Scharbo served as COO of Case-Mate, testing new ideas for store layout and design. Sales 2008: $1.69 billion a provider of leather accessories for cell phones and These stores represent the early stages of Duane RX Sales 2008: $777.4 million other digital devices, which he co-founded in 2005. Reade’s ultimate strategic direction. Management Store Count: 245 More recently, Duane Reade tapped former Longs stated that it will work to refine and advance their 1 • January 19, 2009 www.drugstorenews.com Drug Store News 008_drsn_01_19_09.indd 1/13/09 3:23 PM Page 8 Kinney expands through innovation, local outreach BY ALARIC DEARMENT recruitment, as well as free screenings for colorec- tal, breast and cervical cancer to uninsured and GOUVERNEUR, N.Y.— In its 105 years, Kinney Drugs has underinsured patients ages 50 and older. grown into an employee-owned company with 87 The chain also is expanding the scope of its retail- stores in central and northern New York and ing business. In November, it announced that it Vermont, operating its own distribution warehouse, would open a new 12,700-sq.-ft. prototype store in pharmacy benefit manager and institutional phar- Syracuse, N.Y., that would provide a broader range macy business. of pharmacy-related health services and healthcare It also has reached out to the communities in products. These would include a pharmacy drive- which it operates, with efforts during Colorectal through window, free prescription delivery, a phar- Cancer Awareness Month last March for which the macist consultant area and a program to provide free New York State Department of Health Cancer “life vials” of patients’ medical and prescription his- KINNEY Services program presented Kinney with a 2008 tories for medical emergencies. The store will include Sales 2008: $759.5 million Innovative Project/Event Award. Kinney had expanded personal care, OTC, beauty, household RX Sales 2008: $580.5 million invited the NYSDOH’s program into 61 stores to and pet products, as well as consumables, a digital Store Count: 87 set up clinics for colorectal cancer outreach and photo center and a greeting card department. Aiming to reinvent Rx, Kerr extends renewal efforts BY JIM FREDERICK drug store marketplace, which demanded a new grams and new ways to partner with physicians, approach to serving patient needs in the Carolinas employer-based health plans and other stakeholders. RALEIGH, N.C. — When a group of former Thrift Drug and a willingness to scrap old concepts of communi- Those efforts have won the chain a high-profile role executives bought Kerr Drug from JCPenney in 1997, ty pharmacy. But it’s a role that Kerr’s leaders have in community wide pharmacy care programs like neither Kerr’s new management team nor the chain always appeared to relish. the Asheville Project and ChecKmeds NC, a state- pharmacy industry it represented knew the North Kerr virtually pioneered the concept of in-store sponsored medication therapy management pro- Carolina chain would soon embark on a mission to health centers staffed by clinical care and home care gram, as well as recognition from many healthcare reinvent the concept of the health-based community specialists, and it continues to push back the frontiers organizations and patient advocacy groups. Among drug store. But over the past decade, that has been of community practice with broad-based clinical pro- them: the American Diabetes Association, which Kerr’s mission. named Kerr the 2008 ADA Provider of the Year for Under chairman, president and CEO Tony Civello, KERR North Carolina, and Outcomes Pharmaceutical Kerr has emerged as the chain drug store industry’s Sales 2008: $665 million* Health Care, which recognized the company as the leading innovator in pharmacy-based patient care. RX Sales 2008: $432 million* top chain drug store provider for medication therapy That role, Civello has indicated, was essentially Store Count: 102 management in 2007. *Sales estimated forced on the company by the realities of a crowded CONTINUED ON PAGE 18 USA Drug adds services, technology PINE BLUFF,Ark. — Any broadline drug store operation technology-fueled approach to merchandising, pany’s corporate headquarters in Pine Bluff. that can thrive on Wal-Mart Stores’ home turf — marketing and distribution, functions that it carries After establishing USA Drug in 1984, LaFrance while maintaining a widely merchandised front end, out not only for its own stores but also for other and a small team of company managers embarked stacks of deeply discounted promotional buys, bou- retail operators through its regional wholesaling on an aggressive growth strategy, acquiring some of tique-style arrays of giftware and other goods, a full- and store-support operations.