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Home , Duane Reade, Kerr Drug, Marketside, Pathmark, USA Drug, Walgreens

Drug Store News realized a long time ago that the retail pharmacy business is a whole lot bigger than just the pure-play drug channel. It’s food, 2010drug, mass and independents, public companies and private companies alike. It’s anywhere in America there is a pharmacy counter operating in a retail environment. That is the way that Drug Store News defines re- 50/ tail pharmacy in 2010. Drug stores that fight for a share of the customer WaLgreens______3 A&P______19 in 2010 can no longer only worry about their com- CVS caremark______4 Fred’s______20 petition from other drug stores. Vendors looking Rite aid______5 Kinney Drugs______20 to maximize distribution can no longer afford a Walmart______6 Meijer______20 myopic, single-channel view of the business. In Leader______7 Kerr Drug______21 pharmacy, health and wellness, the idea of chan- Good Neighbor______8 USA Drug______21 nel blurring gave way a long time ago, under the Kroger______9 Hannaford______21 sheer competitive force of the retailer and the will Safeway______10 shoprite______22 of the consumer, to a new world order where the Health Mart______11 Sav-mor______22 Target______12 Raley’s______22 lines that once delineated one class of trade from Kmart______13 Thrifty White______23 another aren’t just blurred — they’re gone. Supervalu______13 Discount Drug Mart___ 23 More simply: Everybody sells everything ev- Medicine Shoppe______14 Save Mart______23 erybody else sells; everyone shops everywhere for Ahold______14 Brookshire Grocery__ 24 everything. So, getting your fair share of that busi- AAP______15 Weis Markets______24 ness requires an entirely different way of looking Costco______15 CARE pharmacy______24 at the industry and the companies that comprise it. Publix______16 Schnucks______25 In the pages that follow, Drug Store News’ editors Sam’s Club______16 Bartell drugs______25 profile the Top 50 pharmacy retailers in America, Bioscrip______17 Marc Glassman______25 measuring all of these very different companies Giant Eagle______17 Brookshire Bros._ ___ 26 H-E-B______18 Fruth pharmacy_ ____ 26 by the one metric that matters — pharmacy sales Albertsons______18 Navarro______26 — and the relative commitment of senior manage- Hy-Vee______18 Lewis Drug______27 ment to pharmacy, health and wellness. Winn-Dixie______19 Pharmaca______27 Drug Store News is the only publication that Shopko______19 Drugstore.com______27 measures the industry this way.

1 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Top 50 by Rx sales 2009 Rx 2009 total % of sales No. stores Rank Company sales* corp. sales* from Rx Total stores with Rx Footnotes 1 , Deerfield, Ill. $41,200 $63,3001 65.0% 6,9971 6,997 * All sales in millions 2 CVS Caremark, Woonsocket, R.I. 37,6002 98,7003 68.0 7,0254 6,964 1 Fiscal year 2009, ended Aug. 31, 2009; 5 3 , Camp Hill, Pa. 17,500 25,700 67.9 4,780 4,780 7,180 stores as of Feb. 28, 2010 — 4 , Bentonville, Ark. 14,980 258,2006 5.8 3,7086 3,694 excludes results from 257 stores ($1.8 billion; $858 million 5 Good Neighbor Pharmacy, Valley Forge, Pa. 9,700 10,800 90.0 3,600 3,600 pharmacy) acquired in February 2010 6 Leader, Dublin, Ohio 7,600 8,700 87.0 3,100 3,100 2 Based on retail sales 7 , Cincinnati 7,400 76,700 9.6 3,245 1,973 3 Includes pharmacy services segment 8 Health Mart, 4,100 5,400 75.0 2,5007 2,500 revenue of $51.1 billion, total retail sales of $55.4 billion 9 Safeway, Pleasanton, Calif. 3,700 40,900 9.0 1,725 1,328 4 Retail stores 10 American Associated , Phoenix 3,5008 3,800 92.0 2,000 2,000 5 Fiscal year 2010, ended Feb. 27 11 Target, Minneapolis 2,900 65,4009 4.6 1,740 1,552 6 U.S. only; includes 2,747 supercenters, 12 Kmart, Hoffman Estates, Ill. 2,500 15,700 16.0 1,327 1,021 803 discount stores, 152 Neighborhood 13 , Amsterdam, The Netherlands10 2,120 22,900 9.3 561 548 Market stores, four stores and two Supermercado stores 14 Supervalu, Eden Prairie, Minn. 2,000 41,90011 5.8 2,350 850 7 As of Jan. 27, 2010 15 , Lakeland, Fla. 1,500 24,300 6.0 1,017 803 8 Following the merger of United Drugs 12 16 Medicine Shoppe International, St. Louis 1,480 1,560 95.0 708 708 and Associated Pharmacies to form 17 , Issaquah, Wash.13 1,400 56,500 2.5 407 407 American Associated Pharmacies 18 Sam’s Club, Bentonville, Ark. 1,200 46,700 2.5 596 519 9 Includes $63.4 billion in retail sales and $1.9 billion in credit card services 19 H-E-B, 1,100 15,00014 7.0 33814 210 10 U.S. stores only 20 , Pittsburgh 1,100 8,200 13.3 220 210 11 Total sales for the fiscal year ended 15 21 Hy-Vee, Des Moines, Iowa 864 6,400 13.5 228 222 Feb. 27 include $32.9 billion in retail sales 22 , Boise, Idaho 843 3,370 25.0 222 211 and $9 billion in supply chain services 23 Winn-Dixie, Jacksonville, Fla. 663 7,400 9.0 515 401 12 U.S. stores only 24 Fred’s, Memphis, Tenn. 599 1,800 33.5 669 307 13 U.S. stores only 25 , Green Bay, Wis. 590 2,000 28.0 14116 140 14 Includes 29 Mexican stores 26 A&P, Montvale, N.J. 58617 9,30017 6.317 435 251 15 Includes 202 and 26 stand-alone drug stores 27 ShopRite, Keasbey, N.J. 58518 11,700 5.018 223 183 16 Includes five Shopko Express stores 28 Kinney Drugs, Gouverneur, N.Y. 568 74319 76.0 91 91 17 Projected; fiscal year 2009 ended 29 , Grand Rapids, Mich. 453 15,100 3.0 190 190 Feb. 28, 2009, results not available at 30 BioScrip, Elmsford, N.Y. 45020 1,30021 15.020 33 33 press time 31 USA Drug, Pine Bluff, Ark. 435 725 60.0 16922 169 18 Drug Store News estimate 32 , Raleigh, N.C. 390 60023 65.0 9023 90 19 Reflects retail sales, as well as revenue from pharmacy benefit management 33 Hannaford, Scarborough, Maine 387 4,300 9.0 173 120 companies, mail order and long-term 34 Raley’s, Sacramento, Calif. 318 3,540 9.0 134 109 care business units 35 Brookshire Grocery, Tyler, 297 2,120 14.0 151 112 20 Sales in retail pharmacy stores only 36 Thrifty White Pharmacy, Maple Grove, Minn. 291 319 91.0 89 89 21 Includes $1.1 billion in specialty pharmacy and $216.2 million in 24 37 Sav-Mor, Novi, Mich. 277 365 83.0 76 76 traditional pharmacy sales 38 Care Pharmacy, Alexandria, Va. 266 280 95.0 52 52 22 Includes 17 stores sold to Walgreens 39 Save Mart, Modesto, Calif. 236 4,800 4.9 244 115 in March 40 Discount Drug Mart, Medina, Ohio 234 53125 44.1 69 69 23 Following the sale of Charleston, S.C., stores to CVS Caremark 41 , Sunbury, Pa. 226 2,500 9.0 164 128 24 Reflects loss of seven franchise stores 42 , St. Louis 206 2,500 8.2 106 10326 25 Sales exlude former mail-order business, 43 Bartell Drugs, Seattle 187 353 53.0 57 57 sold in 2009 44 Marc Glassman, Cleveland 150 1,000 15.0 65 52 26 Includes one stand-alone pharmacy 27 28 27 45 Navarro Discount Pharmacies, Miami 112 320 35.0 28 27 27 Based on 28 pharmacy store locations 46 Fruth Pharmacy, Point Pleasant, W.Va. 111 134 83.0 25 25 28 Includes one small non-Rx location 47 Brookshire Bros., Lufkin, Texas 91 1,170 7.8 7129 67 at Miami National Airport 48 Lewis Drug, Sioux Falls, S.D. 75 149 50.0 3230 32 29 Excludes 31 c-stores 49 Pharmaca Integrative Pharmacy, Boulder, Colo. 48 82 59.0 22 22 30 Includes Lewis Drug/Lewis Family Drug stores 50 Drugstore.com, Bellevue, Wash. 37 413 9.0 NA NA

2 • April 2010 DrugStoreNews.com Drug Store News RETAIL PHARMACY2010PHARMACY A 50/50/NNUAL2010 2010REPORT DR deal, store redesign reflect fresh thinking

By Jim Frederick muscles on other fronts, as well. On the healthcare side, In an America still mired the company is forging alli- in recession and on the verge ances with such big employ- of a sweeping transforma- ers as Caterpillar and Delta tion of its healthcare system, to provide direct pharmacy- Walgreens suddenly seems care services and prescrip- to be everywhere. tion discounts to their On the acquisitions front, health plan members. Hav- the nation’s top drug chain ing recently restructured is on the prowl, making its pharmacy and clinical deals to scoop up health components to create drug store powerhouse a unified pharmacy, health- Duane Reade; - and-wellness solution, Wal- based Snyder’s Drug Stores; greens also is rapidly ex- USA Drug’s 17 Super D and panding its worksite health Ike’s stores in Memphis, centers and pharmacies on Tenn.; 12 Eaton Apothecary employer campuses — and pharmacies in the Boston broadening its reach in such area; and three El Amal areas as home health care, stores in and the specialty pharmacy and prescription files of 11 other professional pharmacy. El Amal pharmacies. The changes don’t stop By far the biggest of those there. Walgreens also is driv- mergers has been the deal for ing full bore to rejuvenate Duane Reade. The purchase and leverage its already of the 257-store chain — powerful presence in the which was finalized March U.S. retail market, rolling out 30 — marks the largest acqui- a new store format, rebrand- Walgreens’ new store design features improved sight lines, product adjacencies and signage, and more appealing graphics. sition in Walgreens’ 109-year ing campaign and a new, history and thrusts it into a more streamlined and easi- dle management, particu- commanding lead in the na- er-to-shop merchandise mix. larly in merchandising, and Headquarters: Deerfield, Ill. W tion’s top drug store market. Company leaders predicted a decentralization of the op- 2009 sales: $63.3 billion* It also enriches the chain with the effort will spur billions of erations management team % change vs. 2008: 7.3% al g ree ns Duane Reade’s expertise in dollars in additional sales as to put divisional VPs in No. of stores: 6,997* urban retailing, beauty mer- customers add more items to closer touch with their own chandising and other areas. their shopping baskets. regions. The effort also gave No. of stores with Rx: 6,997* Walgreens president and Behind the store renewal rise to such big initiatives as Avg. store size: 14,700 sq. ft. CEO Greg Wasson hinted campaign is a sweeping set Customer Centric Retailing, Rx sales: $41.2 billion that adding Duane Reade’s of initiatives launched in fall the Power project to central- % of sales from Rx: 65% growing experience in high- 2008, as Walgreens set out to ize prescription filling func- Sales per store: $9.05 million end cosmetics and fragranc- reinvent its retail and health tions and the “Rewiring for * Reflects fiscal year 2009, ended Aug. 31, 2009; 7,180 stores as of es could spark a transforma- mission. Among its ambi- Growth” cost-reduction and Feb. 28, 2010 — excludes results from 257 Duane Reade stores tion at Walgreens’ beauty tious goals: to cut its bloated efficiency campaign. Com- ($1.8 billion; $858 million pharmacy) acquired in February 2010 Source: Company reports departments, too. “We all cost and inventory structure, pany leaders predicted the know department stores are centralize time-consuming “Rewiring” program will “Shoppers are reacting posi- store with each trip. “We’re challenged in this economy, pharmacy dispensing tasks save Walgreens roughly a tively to our CCR format,” really focused on gross profit like other retailers, and these so pharmacists could con- half-billion dollars in fis- Wasson told investment an- per basket,” Wasson said. prestige beauty [suppliers] centrate on patient care and cal 2010 and $1 billion next alysts March 23. “This is an Walgreens’ CEO also re- are looking for ways to grow medication therapy manage- year as it cuts inventory and ongoing process with many vealed that CCR already has their business,” he told Drug ment, revitalize customer operating costs, and scales checkpoints along the way led to a significant reduction Store News in a recent inter- demand at the front end, back on store construction. to allow us the opportunity in redundant store items at view. “They’re reluctant to capture more pharmacy and Now well into its second to tweak and refine as need- the front end. “The further sell their goods to ... the drug front-end market share and year, CCR already has led ed. As we move into the we get through the SKU re- channel. But if we have an of- pull together all 8,000 of its to a massive reduction in next phase, we’ll continue duction — and we’re about fering and shopping experi- “points of care” in a bid to store inventories of some to build sales, take work out 85% done now — the easier ence like the Look Boutique, more effectively market it- 4,000 SKUs, a streamlined of stores, lower inventory it will be to roll this out go- then they may be more will- self to health plan payers as and easier-to-find assort- and, most importantly, im- ing forward,” he said. ing to do that. And Duane a full-service, fully integrated ment and a new, more open prove our customers’ over- The ultimate objective, said Reade has had some success health-and-wellness solution. store design that features all shopping experience.” EVP and CFO Wade Mique- with that; they already carry Walgreens’ massive over- improved sight lines, prod- A prime CCR objective, lon, is “to understand how three prestige brands today.” haul spawned sweeping uct adjacencies, signage and he added, is to prompt cus- to better serve our customers Walgreens is flexing its changes in upper and mid- more appealing graphics. tomers to spend more in the Continued on page 28

3 • April 2010 DrugStoreNews.com Drug Store News RETAIL PHARMACY2010PHARMACY A 50/ NNU50/AL2010 2010REPORT Leveraging health and choice by the minute

By Antoinette Alexander those offerings and will intro- duce them for targeted drugs As the healthcare-reform dispensed under the tradi- battle raged on, CVS Care- tional PBM setting. PGx clini- mark spent much of 2009 po- cal services were expected to sitioning itself along the front be introduced to CVS Care- lines and striving to lower mark’s PBM clients in second overall healthcare costs and quarter 2010. In addition, the improve patient outcomes partnership opens the door through better medication ad- for future programs to test for herence. There’s no doubt the certain hereditary diseases. company’s efforts will remain Serving as yet another in- robust going forward in 2010 dicator of CVS Caremark’s and beyond. growing commitment to the “Throughout 2009, we con- field of personalized medicine tinued to enhance our posi- is the selection of Per Lofberg tion as the largest pharmacy as the new president of its PBM healthcare provider in the na- business. Lofberg, who served tion,” Tom Ryan, chairman, as president and CEO of Gen- president and CEO, told ana- eration Health, which now has lysts during the company’s increased financial and stra- fourth-quarter conference call tegic ties to CVS Caremark, in February. succeeded Howard McLure as Contributing to the favor- president of the PBM business. able year was the company’s McLure retired on Nov. 27. pharmacy benefit manage- “As I’ve traveled around ment business, which experi- the company this past month, enced a boost in mail-choice I’ve continued to be impressed penetration, a rise in generic by the breadth and depth of dispensing rates and growth talent in the organization and The number of clients in CVS’ money-saving Maintenance Choice 90-day prescription program has more than tripled in the past year. within its specialty pharmacy the number of innovative pro- operation. “We had a suc- grams under way, which can crease in 90-day utilization, Headquarters: Woonsocket, R.I. cessful repositioning of our offer new, improved solutions with a substantial savings for c

sales message to focus on our to customers,” Lofberg told the client and its members,” 2009 sales: $98.7 billion* vs leading PBM capabilities first, analysts during the fourth- Ryan said. “It’s important % change vs. 2008: 16.7% and we’re seeing a positive quarter conference call, hav- to note that our [generic dis- No. of stores: 7,025** caremark response from the consultant ing been on the job for about pensing rate] and adherence No. of stores with Rx: 6,964 community, as well as from cli- a month. “These include, measures also improve with • ents, as we head into the 2011 among other things, pro- Maintenance Choice, so it’s Avg. store size: 8,000 - 25,000 sq. ft. •• selling season,” Ryan said. grams that integrate both ben- really a win-win.” 10,000 - 13,000 sq. ft. To bolster its PBM business efit designs, and member and The company’s Minute- Rx sales: $37.6 billion† further, the company contin- physician interaction across Clinic division, which oper- % of sales from Rx: 68% ued to make investments and Caremark’s main service plat- ates about 570 clinics in 56 Sales per store: $7.9 billion† to forge strategic alliances, as form and CVS retail stores.” markets, has been, and will * Includes pharmacy services segment revenue of $51.1 billion, total retail sales of evidenced by its investment Perhaps one of the most no- continue to be, a major focus. $55.4 billion ** Retail stores • Existing retail stores •• New stores in genetic benefit manage- table programs is CVS Care- In fact, through the Minute- † Based on retail sales Source: Company reports ment company Generation mark’s Maintenance Choice, Clinic division, now headed Health — a move that likely which allows consumers to up by Andrew Sussman, the diabetes-monitoring services. which 100 will be relocations. illustrates the next genera- purchase chronic 90-day pre- company is looking to further CVS Caremark has stated Meanwhile, CVS, which has tion of community pharmacy. scriptions at CVS stores for augment a patient’s primary that it expects MinuteClinic to taken an innovative approach Through its partnership with the same price as mail-order. care provider’s services by break even by the end of 2011. to beauty over the years, con- Generation Health, CVS Care- CVS Caremark has reported focusing in 2010 on adding On the retail side of the tinues to roll out its Beauty360 mark will expand pharma- that it has more than 470 cli- protocol-driven monitoring business, 2009 was a mile- stores. The high-end beauty cogenomic testing to its PBM ents and roughly 5.5 million services for such chronic con- stone year as the company concept was unveiled in customers to predict how they lives on Maintenance Choice, ditions as hypertension and opened in September its November 2008 at a CVS will respond to medications up from 130 clients at the be- high cholesterol. This will be 7,000th store in Little Canada, store in the center of Dupont in such areas as oncology, ginning of 2009. The company done in coordination with a Minn. The company since has Circle in Washington, D.C. As cardiovascular medicine and has noted that 10% of the cli- patient’s medical home and announced its entrance into of press time, there were 17 HIV. CVS Caremark already ents on Maintenance Choice is designed to improve adher- several new markets, includ- Beauty360 stores in operation, provides some PGx interven- are new to CVS Caremark. ence and outcomes. Minute- ing Puerto Rico, St. Louis and mostly located in California. tion services in its specialty “Clients switching from vol- Clinic already has rolled out Memphis, Tenn. For 2010, Four additional Beauty360 lo- pharmacy business, but this untary mail to Maintenance asthma-monitoring screening the company plans to open cations are expected to open partnership will expand upon Choice see a significant in- and has launched a pilot for about 250 to 300 new stores, of soon in that state.

4 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY2010 AA 50/ NNU50/NNUALAL2010 2010 REPREPOORTRT Immunizations, Wellness+, a shot in the arm

By Michael Johnsen include shingles, tetanus, hepatitis A and B, pneu- Rite Aid is a better com- mococcal, MMR (measles, pany today than it was yes- mumps and rubella) and Var- terday. And it will be a better icella (chicken pox). company tomorrow than it is Wellness+, which has today. “I feel very good about been piloted across four test where our retail business is,” markets since October 2009 John Standley, Rite Aid presi- and is expected to launch dent and COO, told analysts chainwide this summer, in March during a conference represents the largest mar- call. “I am confident we are keting expenditure that going to continue to make Rite Aid “has made in sev- great progress here with our eral years,” Standley said, retail business.” and should go a long way Standley will assume CEO toward improving both responsibilities from pres- front-end and back-bench ent CEO and chairman Mary productivity. “Over 50% of Sammons in June. Sammons front-end sales and 40% of will remain at Rite Aid as prescriptions in the test mar- chairman. “[Standley] brings kets are now on the card, the right combination of op- and consumer research tells erational knowledge, hands- us the program has been on management and financial very well-received,” Stand- orientation to successfully ley said. “If we extrapolate lead our company for the fu- enrollment from the test ture,” Sammons said. markets to the entire chain, The immediate future al- we should expect we will ready is taking shape, and have in a range of 15 to 20 Rite Aid plans to increase the number of immunizing pharmacists from 2,000 to 6,000 this year, as well as launch its highly touted Rite Aid has begun to posi- million members enrolled at Wellness+ program this summer. tion itself to best optimize the program’s maturity.” opportunities in the coming Capturing prescription loy- der-penetrated on either the year. Rite Aid starts out fiscal alty may prove more crucial to- front end or the pharmacy.” Headquarters: Camp Hill, Pa. 2011 with a strong liquidity day with the recent passing of One of the greater chal- 2009 sales: $25.7 billion* position and less debt than healthcare reform, Sammons lenges facing Rite Aid to- % change vs. 2008: -2.4% R ite A i d it carried in the past year. noted. While the additional day is improving same-store No. of stores: 4,780 And going forward, Rite 32 million covered Americans sales results. “We believe the No. of stores with Rx: 4,780 Aid’s brass feel they have still may be a few years out, company’s underinvestment identified the right mix of the $250 prescription-drug in [capital expenditure] and Avg. store size: 12,400 sq. ft. initiatives to foster the most voucher for Medicare recipi- cost-cutting is beginning to Rx sales: $17.5 billion growth. The company plans ents and the allowance of stu- pressure results,” said Credit % of sales from Rx: 67.9% to increase the number of Rite dents as old as 26 to remain on Suisse analyst Ed Kelly in a Sales per store: $5.4 million Aid immunizing pharmacists their parents’ healthcare poli- research note published ear- * For fiscal 2010, ended Feb. 27 Source: Company reports, from 2,000 to 6,000 this year, cies represents incremental, lier this year. Drug Store News as well as launch its highly albeit small, growth opportu- Rite Aid may begin real- touted Wellness+ program nities this year. izing those same-store sales this summer. And Rite Aid’s Segmentation, where Rite improvements later this year charged with optimizing Rite vate brand products, with store segmentation strategy Aid identifies distinct market- with greater implementation Aid’s store segmentation few exceptions, will be mi- is expected to continue pay- ing opportunities and mer- of its segmentation strategy. strategy and developing new grated over time to these ing dividends through fiscal chandising synergies a­cross “Segmentation is one of our front-of-store initiatives. new brands with new, more 2011, executives noted. either low-volume or high- top priorities, and [Bryan Another initiative Rite Aid contemporary packaging,” Rite Aid’s plans to triple the volume stores, also is expected Shirtliff] will play a key identified for fiscal 2011 is a Standley said. “This new number of immunizing phar- to play a significant role in role as we expand some of major overhaul of its private- brand architecture, com- macists across its store base Rite Aid’s fiscal 2011. “From our pilot programs into label positioning through bined with strong promo- is expected to give the chain a merchandising perspective, broader market areas,” re- category branding: Rite Aid tional support, good price a strong presence in most of we will be working on the marked Ken Martindale, Pharmacy will be preva- positioning and continued its major markets during the low-volume stores, urban senior EVP merchandising, lent on health products; Re- development of new items, influenza season. It’s a trend stores and health-and-well- marketing and logistics. newal will represent beauty will help us grow private- that’s being replicated across ness stores,” Standley said. Bryan Shirtliff earlier this products; Pantry for food brand sales and meet the retail pharmacies, especially “From a segmentation sales year was named to the new and consumables; Home for needs of today’s consumer.” as flu shots aren’t the only growth perspective, Well- position of SVP business de- household goods; and Tuga- The retailer currently en- inoculations that can be de- ness+ will really help us attack velopment for Rite Aid, and boos for baby. joys a 15.3% penetration in livered. Other immunizations those stores where we are un- in that capacity has been “All of our existing pri- private label.

5 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Taking ‘Simple Steps’ to health and wellness By Mike Troy Walmart communicated it are indicative of a philoso- The pace at which Walmart phy that involves the com- launched health-and-wellness pany asserting itself on the initiatives slowed in 2009, and national stage in a high-pro- understandably so given chal- file manner. lenging market conditions The strategy was on full and the unsustainable level display last June just as the of activity undertaken by the debate over healthcare re- company in prior years. form was beginning to grow Rather than launching contentious. Walmart and more pilot programs or par- several longtime foes in the ticipating in another health- labor movement cast their care think tank, Walmart fo- lot with the Democratic ad- cused on extending existing ministration and supported efforts while accelerating a employer-mandated cover- broad slate of merchandising, age, but conditioned their marketing and operational support based on guarantees initiatives that comprise its of cost containment. The po- now 4-year-old Project Im- sition was unpopular with pact program. The pharmacy, others in the retail industry, health and wellness business- and Walmart incurred the es are affected by Project Im- wrath of the National Retail pact because the program in- Federation, which viewed volves an increased emphasis mandates as catastrophic for on store remodeling to make the retail industry and called the shopping experience con- Walmart’s move astonishing. venient and female-friendly. “Seeing the company in The biggest development directly affecting Walmart’s pharmacy business in 2009 was an extension of the flat-rate pricing approach However, the biggest de- lock-step with the unions to generics that began in fall 2006 with the launch of the $4 program. velopment directly affecting on this issue was troubling, the pharmacy business was to say the least,” NRF presi- port for first lady Michelle an extension of the existing dent and CEO Tracy Mullin Obama’s Let’s Move initia- Headquarters: Bentonville, Ark. flat-rate pricing approach to wrote in a sharply worded tive, which targets childhood 2009 sales: $258.2 billion* W generics that began in fall rebuke of Walmart’s posi- obesity. “As the nation’s larg- % change vs. 2008: 1.1% almart 2006 with the launch of the tion. “Although the move est food retailer, we know No. of stores: 3,708* $4 program. The program may provide a short-term firsthand how important it is No. of stores with Rx: 3,694* was extended last year to public relations boost to to make healthy choice more include a mail-service com- Walmart, it could have long- convenient and more afford- Avg. store size: 185,460 sq. ft.** ponent, which allows cus- lasting, devastating conse- able for American families,” * U.S. only; includes 2,747 Rx sales: $14.98 billion supercenters, 803 discount stores, tomers nationwide to receive quences to retailers through- Walmart EVP corporate af- 152 Neighborhood Market stores, % of sales from Rx: 5.8% a 90-day supply for $10 via out the country.” Mullin said fairs Leslie Dach wrote in a four Marketside stores and two Supermercado stores Sales per store: $69.6 million free mail delivery. The pro- the NRF couldn’t condone letter to the first lady. “We ** Supercenters only Source: Drug Store News gram enables customers in the actions of the world’s will use our unique posi- rural and urban areas who largest retailer if it would tion in the marketplace to don’t have convenient access come at the expense of ev- increase access to and afford- Walmart in that it blended illustrates the close connec- to one of Walmart’s 3,694 eryone else, and so it came ability of healthy foods.” sharp prices on such health- tion that exists between tradi- pharmacies to receive their out swinging on the issue. Walmart did just that less oriented food brands as Yo- tional healthcare businesses prescriptions, and it enables Walmart’s decision to sup- than a week later with its plait, Health Choice, Kashi, and those related to lifestyle the company to position it- port mandated coverage was Simple Steps merchandising Special K, Brita and Egg choice. The health-and-well- self as a solutions provider somewhat of a no-lose prop- and marketing initiative that Beaters with educational ness business at Walmart is when it comes to health care. osition for the company since was either an extreme coinci- content about eight simple expected to benefit from the “Our $10 mail delivery it had been forced to upgrade dence or one of the benefits steps people could take for company’s ongoing empha- prescription program is a its employee health benefits of having someone like Dach better health. The major em- sis on Project Impact and an true reflection of Walmart’s after a decade of scrutiny and — a well-connected, former phasis was on smart food accelerated remodeling pro- commitment to drive unnec- ridicule by labor activists. In high-level Democratic oper- choices, but two pages were gram, which more promi- essary cost out of the health- essence, the company simply ative — on the payroll. Either devoted to fitness items, nently feature pharmacy and care system so Americans can wanted a level playing field way, the week-long Simple while one page was avail- adjacent categories. live healthier, better lives,” so its cost structure wouldn’t Steps program kicked off on able for nutritional supple- Walmart plans to spend said John Agwunobi, presi- be a disadvantage relative to Feb. 14, and featured promi- ments and Walmart’s Equate between $13 billion and $15 dent of Walmart’s health- other retailers that provide nent overhead signage at the brand smoking cessation billion this year on capital and-wellness division. less generous benefits. entrance of supercenters and and weight-loss shakes. projects, but domestically, The mail-order program More recently, Walmart a 12-page marketing piece While not a specific phar- funds will be used more for and the manner in which was quick to voice sup- that was a little different for macy initiative, the program Continued on page 28

6 • April 2010 DrugStoreNews.com Drug Store News RETAIL PHARMACY2010PHARMACY A 50/ NNU50/AL2010 2010REPORT Cardinal adds muscle to its Leaders By Jim Frederick Barrett noted that the drug wholesale and health service It may not make a lot giant has “made a commit- of splashy business-news ment to rebuilding our retail headlines, or wow retail independent customer base, experts with a single glitzy which is showing early signs store design or merchandis- of success.” ing concept, but with more In 2009, Barrett said, “we than 3,000 independent launched several exciting drug stores under its ban- new programs to help our ner, more than $9 billion customers more effectively in combined annual sales market their stores, improve and the national marketing, the profitability of their front- merchandising and techno- of-store operations and pro- logical prowess of a power- vide value-added services ful corporate parent behind through specialized care cen- it, Leader Pharmacies has ters.” In addition, he said, “it earned its stripes as a quiet will also be easier to do busi- giant of pharmacy retailing. ness with Cardinal Health Cardinal purchased Lead- through our commitment to er in 1987, shortly after its investing in our information incorporation as a buying technology infrastructure and marketing cooperative that simplifies interactions for independent drug store with customers.” owner/operators. Since then, Cardinal’s toolkit for Leader has offered mom- Leader includes automated and-pops and single-market replenishment and pricing pharmacy owners a uni- systems, exclusive brand- fied brand and private-label ing programs and product umbrella, expertise in mar- lines, support for immuni- keting and merchandising, zation programs and other Armed with marketing support and a steady infusion of new, data-driven technology from Cardinal, Leader owners have merged their multistore purchasing power clinical services. strengths to become a widely recognized pharmacy brand with more than 3,100 drug stores in urban, small-town and rural markets. and, not least, the promise of Recently, Leader’s com- safe harbor in stormy eco- bined store network also is gives Cardinal and Leader nomic times. gaining more equal footing the power to negotiation pre- Headquarters: Dublin, Ohio More than 3,100 Leader with pharmacy benefit man- scription reimbursement rates 2009 sales: $8.7 billion drug stores now operate in agers, according to Cardinal with virtually all managed lea d er urban, small-town and rural executives, through the ap- care networks in the United % change vs. 2008: NA markets, averaging upward plication of LeaderNET, a ser- States, including more than No. of stores: 3,100 of $3 million a year in sales vice aimed at putting Leader 50 Medicare Part D plans, ac- No. of stores with Rx: 3,100 per store, according to one store owners on a more equal cording to the company. Avg. store size: 2,500 sq. ft. Cardinal executive. Those footing with PBMs. The pro- “In the past year alone, Rx sales: $7.6 billion stores “can take advantage gram provides negotiating Cardinal Health has more % of sales from Rx: 87% of a vast array of marketing prowess and expertise, ac- than doubled the number of and support services,” the cess to new niche markets, long-term care contracts it of- Sales per store: $2.8 million company reported. Armed membership in a provider fers LeaderNET members,” Source: Drug Store News with marketing support and network and other services, noted a representative. “The a steady infusion of new, according to Steve Lawrence, company has recently added data-driven technology to Cardinal’s SVP independent contracts for niche markets, hensive, business-to-consum- ing power, boost inventory streamline their ordering sales. “Customers who use all including immunizations er Web site program “that turns and make more intel- systems and make more of our managed care services and 90-day medication sup- makes it easy for Leader ligent decisions about front- intelligent decisions about experience an average annual ply programs. Cardinal members to take their retail end space allocation; pricing, purchasing and savings of $42,000 to $70,000 Health also offers participat- pharmacy directly to custom- • The Source generics promotions, Leader owners per year,” Lawrence asserted. ing pharmacies access to a ers via the Internet,” accord- buying program, recently have merged their strengths As one of retail pharmacy’s call center support team that ing to Cardinal; upgraded by Leader’s par- to become a widely recog- largest Pharmacy Services can provide audit assistance • A broad promotional ent company. “We have ex- nized pharmacy brand. Administrative Organiza- and answer managed care, support system consisting of panded relationships with Behind recent initiatives tions, LeaderNET manages reimbursement and other circulars, radio and television our generic manufacturing and sales-driving efforts at network contracting and plan general questions.” advertising and direct mail; partners to provide key ben- Leader is a more aggressive administration for indepen- Among the network’s • The Retailing RoadMap, efits for our customers, as store-support policy from its dent operators in the United other support services for which offers guidance and well as incremental value to parent company. Cardinal’s States, Puerto Rico and the Leader members: resources to bolster Leader both Cardinal Health and chairman and CEO George Virgin Islands. The network • LeaderOnline, a compre- pharmacies’ customer draw- Continued on page 30

7 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Independent network shows value of service

By Michael Johnsen meet when we go out are en- trepreneurial,” he added, of- Dave Yost, Amerisource- fering services that just can’t Bergen president and CEO, be found across their big-box likes to make the point that competitors — such as home throughout all of his 36 years delivery, compounding or in the pharmaceutical distri- long-term care packaging. bution business, people have The GNP pharmacist, on been talking about the de- average, owns about 1.5 phar- mise of the independents. macies and fills more than 200 And while the independent prescriptions per day. “The pharmacy business certainly independents have really ben- isn’t easy, it’s not on its last efited from many more pre- legs, either — at least not at scriptions per store, and even ABC. ABC has grown its inde- though they are at lower mar- pendent Good Neighbor Phar- gins, that has really helped macy base from a little more them stay in business and be than 3,000 locations a year ago profitable,” Collis said. to 3,600 locations today. In 2008, GNP launched So independent pharma- its GNP Premier package, a cists still are realizing growth, program that provides retail and more are discovering coaching to independents the upside in leveraging the and identifies key metrics buying power inherent to a that the pharmacist ought 3,600-store chain that’s associ- to be following in his or her ated with an independent net- market. “One of the things work like ABC’s Good Neigh- we do is help [our GNP in- bor Pharmacy — which gets dependents] ... identify who even stronger with the total of their best patients are,” Collis more than 5,000 independents said. Take those patients who The GNP pharmacist, on average, owns about 1.5 pharmacies and fills more than 200 prescriptions per day. as all of the Good Neighbor are managing six or more Pharmacy Provider Network prescriptions per month — front-end products that help good n ei g hb o r pharmacies are included. All GNP Premier teaches inde- generate foot traffic and has Headquarters: Valley Forge, Pa.

5,000 independents have ac- pendents how to better cap- designed a planogram to best 2009 sales: $10.8 billion pharmacy cess to the managed care ture and keep such patients. present those products. It’s % change vs. 2008: 27.1% contracts and the ability to Collis cited GNP’s Prescrip- not about selection, necessar- provide for those covered pa- tion Savings Club, a sort of ily. Rather, ABC helps stream- No. of stores: 3,600 tients. The franchisees, on the frequent-flier rewards pro- line category selection to best No. of stores with Rx: 3,600 other hand, represent a deeper gram, as an example. suit the needs of the individ- Avg. store size: 3,100 sq. ft. commitment, paying a flat The metrics used to identify ual independent. When ABC Rx sales: $9.7 billion rate fee — which is significant- and capture those prescrip- tested the concept in 2007, % of sales from Rx: 90% ly reduced — on programs tion-heavy patients are real- the front-end strategy gener- Sales per store: $3.0 million which support their business, ized through GNP InSite, a ated revenue lifts between Source: Company reports, Drug Store News such as business management database housing operational 9% and 21% across 20 pilot tools, positive support and intelligence from hundreds stores. And personalized leverage, though these stores of independent pharmacies. coaching on pharmacy busi- are required to follow the fran- Within the InSite system are ness management and the [our independents] manage currently are advertising. The chise’s guidelines. dashboards that provide the best utilization of all of the their business better and give national ads will be slotted “If you put all these 3,600 analytics and personalized in- retail programs ABC brings them advantages that many to appear within a two-week stores together, we would be formation to help the pharma- to bear contributed between of the larger chains’ customers time period, while the local the third-largest chain in the cies improve business prac- $5,000 and $30,000 in bottom- have,” Collis said. ads will appear in the remain- , and we contin- tices. The InSite system also line profits when ABC tested The focus over the next six ing two weeks of the month. ue to create touchpoints and allows customers to compare the coaching concept across months at GNP is a national “This strategy comple- stickiness with this customer their performances against 13 pilot stores in 2007. TV advertising campaign that ments what our pharmacies population,” said Steve Col- peer-group pharmacies. Another advantage ABC will premiere in 90 markets. are already doing, and takes lis, ABC EVP and president GNP also provides front- touts is the ability to better The effort kicked off in early advantage of our national ef- of AmerisourceBergen Drug, store assistance; according coordinate managed care con- March with four advertise- forts to show how instrumen- a division of ABC that pro- to ABC, GNP locations field nectivity issues. “We offer not ments that highlight the im- tal your Good Neighbor Phar- vides pharmaceutical distri- 52% more sales of OTC medi- only the contracting on their portance of the pharmacist in macy pharmacist is in your bution and pharmacy man- cines than non-GNP stores. behalf, but also help desk, patients’ health care. The cam- own health care,” explained agement solutions, during a By profiling the indepen- profitability analysis tools, paign was developed to be Jim Grigg, group VP program recent meeting with analysts. dent pharmacy consumer, prescription saving clubs, so conjunctive to the local Good management, retail sales and “The independents that I ABC uncovered a portfolio of many things that really help Neighbor Pharmacies that marketing for GNP.

8 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY2010 AA 50/ NNU50/NNUALAL2010 2010 REPREPOORTRT Market share drives growth in tough times

By Jim Frederick lion, the company reported in March. Excluding fuel When the going gets tough, sales, total sales rose 2.9%, the tough grab market share. and same-store That’s certainly the case sales rose 2.1%. with Kroger, the nation’s “Kroger’s strategy gener- largest supermarket retailer ates value in good times and and seventh-largest pre- bad,” Dillon said March 9. scription dispenser. In the “During a year that proved prolonged depths of the re- to be extremely trying, cession of 2008-2009, Kroger Kroger ... increased the num- eked out a modest but mean- ber of households loyal to ingful same-store sales gain Kroger stores.” and added to its huge base of If anything, Kroger has loyal customer households, bolstered its standing as a management asserted. power player in both food By exploiting its massive and drug retailing. The Cin- market clout, and innovating cinnati-based company oper- with new services and in-store ates in 31 states through two offerings, Kroger also wrested dozen local banners, includ- some market share gains ing the Kroger flagship brand from its competitors amid and such well-known names last year’s upended economy, as , , Fred SVP and CFO Mike Schlot- Meyer, Fry’s, , man told investment analysts and Smith’s Food and last month. Citing data from Drug. All told, its holdings ACNielsen, he said: “Kroger’s comprise 2,468 supermarkets share overall rose approxi- and multidepartment stores Kroger has bolstered its standing as a power player in both food and drug retailing by adding to its base of loyal customers. mately 60 basis points during — nearly 2,000 of which in- fiscal 2009. This data also indi- clude pharmacies and more ly will reopen in May, at which cates that our share increased than 720 of which offer drive- time each will include a drive- Headquarters: Cincinnati in 13 of the 17 marketing ar- through windows — along through pharmacy staffed by 2009 sales: $76.7 billion kr og er eas outlined by the Nielsen with 777 convenience stores professionals from another % change vs. 2008: 0.8% report, declined in three and under a variety of banners, division of Kroger: the Dillons No. of stores: 3,245 remained unchanged in one.” 374 jewelry stores, 893 super- supermarket chain. Chairman and CEO Da- market fuel centers and 40 Within its sprawling, 2,000-​ No. of stores with Rx: 1,973 vid Dillon added, “Through- food-processing plants. store pharmacy network, Avg. store size: 44,272 sq. ft. out 2009, Kroger success- In fiscal 2008 — the most Kroger professionals con- Rx sales: $7.4 billion fully achieved identical sales recent year for which full fig- tinue to develop clinical and % of sales from Rx: 9.6% growth, one of the key objec- ures were available — Kroger residency programs. “Special Sales per store: $23.6 million tives of our business model. pharmacists filled more than emphasis is [given to] phar- Source: Drug Store News We continue to widen the gap 131 million prescriptions, macy care programs, such as between Kroger’s identical generating roughly $6.7 bil- immunizations, obesity man- sales growth trends and those lion in pharmacy revenue, agement, diabetic care, cho- an important part of Kroger’s sq. ft., and most include not of most of our competitors.” versus $6.5 billion the pre- lesterol screening, emergency convenient, one-stop shop- only pharmacies, but also ser- The most daunting of those vious year. The number of contraception and more,” ping strategy, and we are vice bakeries, delis, seafood competitors remains Walmart, supermarkets with pharma- one company report noted. focusing on improving our and meat departments, floral which a decade ago eclipsed cies has grown steadily, from Some of those services customers’ pharmacy ex- shops, expanded general mer- Kroger as the nation’s top 1,898 in fiscal 2004 to 1,973 at are offered online, includ- perience,” the company re- chandise and whole health food retailer. Kroger compet- the end of fiscal 2008, or near- ing the EasyFill prescription ported. To that end, the chain sections with organic pro- ed with about 1,190 Walmart ly 80% of Kroger’s store base. refill system and an inter- continues to offer a $4 gener- duce and natural health-and- supercenters throughout the Even a handful of its con- active Health Guide that ic-pricing program for 30- beauty aids, snacks and other United States in 2009, ac- venience stores have jumped provides health assessment day supplies and a $10 price alternative products. More cording to the company — or into the pharmacy business, tools, medication guides and on many generics in 90 day than 100 Kroger combo stores roughly 60 more supercenters including a Tom Thumb C- other services for customers. quantities. Some 50 stores go beyond that high standard than existed in 2008. store in Florida and the Kwik Kroger also continues to pro- across the United States also with a Fresh Fare concept that Despite that competition, Shop chain based in Hutchin- vide such mobile services as host walk-in clinics. emphasizes “high-quality per- and the “deflation and the son, Kan. Kwik Shop has ex- diabetes screenings, immuni- Kroger’s designated pro- ishables and top-notch cus- slow pace of the economic panded two of its convenience zations and wellness educa- totype store is a food-drug tomer service,” according to a recovery, which continues stores in the Wichita market to tion programs, often through combination store, includ- company report. to restrain consumer spend- accommodate both pharma- clinical pharmacists or phar- ing full prescription centers With either format, Kroger ing,” Dillon said, fiscal 2009 cies and a larger fresh-foods macy residents. and drug store departments. noted, “Our combo stores sales grew 0.8% to $76.7 bil- selection. The stores reported- “Pharmacy continues to be Newer combos average 73,000 Continued on page 28

9 • April 2010 DrugStoreNews.com Drug Store News RETAIL PHARMACY2010PHARMACY A 50/ NNU50/AL2010 2010REPORT ‘Lifestyle,’ payer solutions take shape

By Antoinette Alexander

The turbulent economy has proven to be challenging for Safeway, as with most other retailers, but 2010 is looking to be on the upswing for the food and drug retailer as it has re- duced everyday prices, forged ahead with its Lifestyle con- cept store and generated the highest annual free cash flow ever for the company. The 1,725-store grocer has been cutting everyday prices — versus focusing on pro- motions — despite the reces- sion to better compete with rivals and position itself for future growth. According to Steve Burd, chairman, president and CEO, the company now is at full- price parity with its primary conventional competition and “well below” its secondary competitors in virtually every market. Burd told analysts during Safeway’s fourth-quar- Instead of focusing on promotions to compete with its rivals, Safeway has busied itself with reducing everyday prices, despite the recession. ter con­ference call in late Feb- ruary that he believes this is “a about $3.88 billion, or 8.8% Gardasil and travel medicines. major milestone that builds on of the company’s 2008 sales Meanwhile, the company Headquarters: Pleasanton, Calif. a foundation for growing sales of $44.1 billion, according to is looking to share the success

2009 sales: $40.9 billion Safeway and market share in 2010.” Safeway’s most recent annual it has seen with its incentive- Safeway’s Lifestyle concept filing. In 2009, Safeway’s sales based health plan by establish- % change vs. 2008: -7.4% continues to take hold. The decreased to $40.85 billion, ing similar programs at other No. of stores: 1,725 company has been embarking namely due to lower fuel costs, employers for a slice of the No. of stores with Rx: 1,328 on this initiative for more than lower same-store sales and cost savings it generates. Avg. store size: 46,000 sq. ft. five years, whereby the stores one less week versus the year- During a keynote address Rx sales: $3.7 billion are dramatically redesigned ago period. Safeway didn’t in Washington at the Busi- % of sales from Rx: 9% with earth-toned decor, sub- break out pharmacy sales in ness Agenda 2010 sponsor­ ­- dued lighting, custom floor- its fourth-quarter results state- ed by the National Business Sales per store: $23.7 million ing and a number of special ment issued in February, but Group on Health, Safeway’s Source: Company reports, Drug Store News features to create an inviting — assuming pharmacy sales Ken Shachmut outlined the ambience. Depending on the trended about the same as in plan, according to reports. store size and local prefer- prior years — it is likely that Shachmut serves as SVP riod. Safeway will not receive than doubled. In fact, our free ence, some features include a pharmacy sales totaled rough- and EVP of the newly consulting fees. cash flow was up 119% to sit-down sushi bar, a walk-in ly $3.6 billion for 2009. formed subsidiary, known As of late March, Safeway $1.49 billion from last year’s temperature-controlled wine One aspect of pharmacy as Safeway Health. Health was in discussions $681 million,” Burd told ana- cellar and a nut bar. that Safeway has promoted Cigna administers Safe- with four potential clients, and lysts. “The big contributors to During 2009, the company is its immunization services. way’s health plan, but the in detailed negotiations with the increase were lower Ca- remodeled 82 stores to the Safeway pharmacy offers im- incentive plan and several el- two of them, Shachmut was pEx and lower tax payments.” Lifestyle format, bringing its munization services for adults ements of it, such as greater quoted as saying. This helped the company total Lifestyle count to just on a walk-in or appointment transparency of drug pricing, It also should be noted that lower its total debt on the year shy of 1,400 stores, or 79% of basis, and also provides im- were developed in-house with the grocer generated free cash nearly $600 million. its store portfolio. Safeway has munization services for busi- input from Cigna and other flow of $1.5 billion in 2009 “We’ve seen our volume stated that it expected 88% of nesses, school campuses, se- firms, Shachmut explained, during a significant period improve steadily each quar- its stores to be Lifestyle stores nior centers or assisted living according to reports. of deflation. This not only ter in the United States with by the end of 2010. facilities. Aside from seasonal Safeway Health will pro- exceeded Safeway’s expec- no real improvement in the In looking at pharmacy — lo- flu, immunizations offered vide analytics, plan design or tations, but also marked the economy, and I think most of cated within 77% of Safeway’s also include, but are not lim- redesign assistance, and will highest annual free cash flow us think the economy will be- store portfolio as of year-end ited to, the meningococcal vac- be paid 25% of the savings ever for the company. gin to see some improvement 2008 — sales for 2008 totaled cine, pneumococcal vaccine, generated over a five-year pe- “Our free cash flow more in 2010,” Burd noted.

10 • April 2010 DrugStoreNews.com Drug Store News RETAIL PHARMACY2010PHARMACY A 50/ NNU50/AL2010 2010REPORT Emerging as a national store brand

By Jim Frederick to continue to grow the net- work by adding pharmacies, In baseball terms, hard- but ... we want to make sure charging Health Mart has that we’re adding pharmacists gone from a little-noticed who are committed to deliv- farm team in class “A” ball ering the personalized, high- to the big leagues — in four quality care we’re known for.” years. In the process, the fran- To that end, he said, “in chise network has exploded 2010, we’re really striving to in size, geographic reach and increase new clinical services market influence while main- and the quality of care — and taining its close-to-the-patient to make sure we’re giving character as a practitioner of our pharmacists the solutions independent pharmacy op- they need to succeed.” erating principles and direct Over the past four years, owner involvement. McKesson has plowed big Health Mart is now a na- sums into a total makeover tional drug store entity with of the chain, with a new store 2,555 stores in all 50 states, prototype and a massive store- coast-to-coast name recogni- support package of newly tion and a firm place among developed automation tools, the industry’s top pharmacy marketing support and pa- brands. Its franchisees are tient-care programs for fran- among the most committed chisees. At the end of January, practitioners of personalized, the company also launched a community-focused customer national TV ad campaign tied care, preventive-health servic- to such major events as the es and diabetes management, Super Bowl, the Winter Olym- backed by the muscle of the pic Games and the Academy franchise company’s strap- Awards. The TV ads “high- Health Mart and McKesson have expanded their suite of clinical and business tools to help franchisees with operating a business ping corporate parent, drug light the personal care and ser- while providing the personal care that independent pharmacies are known for. distribution and health servic- vices ... such as diabetes coun-

es giant McKesson Corp. seling and testing” offered by to help Health Mart owners H ealth M art “In 2006 we had 260 stores,” Health Mart stores, according perform — and bill for — Headquarters: San Francisco noted Health Mart president to the company. medication therapy manage- 2009 sales: $5.4 billion Tim Canning in a late-March Health Mart and McKesson ment with their patients. % change vs. 2008: 28% interview. “We’re pleased with have unveiled an expanding “We’re piloting an MTM No. of stores: 2,500* the strong growth, with 2,555 suite of clinical and business program in and stores today. That phenomenal tools to help steer franchisees Atlanta,” Canning explained. No. of stores with Rx: 2,500* growth is exactly what we’re through the maze of operat- “It’s a software technology Avg. store size: 1,000 - 10,000 sq. ft. looking for in terms of lever- ing a business while provid- that electronically connects the Rx sales: $4.1 billion aging the strength of thou- ing the kind of personal care pharmacist with the physician, % of sales from Rx: 75% sands of independents.” independent pharmacies are the payer and the patient, and Sales per store: $2.2 million Management celebrated a known for. Said Canning, it makes sure the pharmacist * As of Jan. 27, 2010 Source: Drug Store News major milestone earlier this “Health Mart is about freeing is delivering the clinical proto- year when Deerborn, Mich.- up our pharmacists and help- col in a consistent way. It also based independent pharmacy ing them become better busi- provides the opportunity for to $1,500 per patient for par- Atlanta market, to the fran- owner Tom Fakih joined the ness people, so they can be the reimbursement by document- ticipating payers — and up to chise chain. “We’re a patient- franchise. His store, Trudell great clinicians they’re trained ing the service they provide.” $450 for patients themselves.” centered business,” Marquess Health Mart Pharmacy, be- to be. And it’s about provid- Several payers have agreed The most recent customer said. “I wanted to partner came Health Mart’s 2,500th ing them not only business to participate in the pilot in satisfaction poll from J.D. Pow- with a franchise that shared franchise member. but clinical solutions.” Wisconsin, in combination er and Associates affirmed the that vision. Obviously, as an “We are proud of that ac- That includes the McKes- with the Wisconsin Pharmacy value of those patient-care ef- independent, I could have se- complishment,” Canning told son-developed Diabetes Life Collaborative and the Univer- forts. U.S. consumers rated lected any of the [franchise or Drug Store News. It represents Center — which ties together sity of Wisconsin, Canning Health Mart highest in service cooperative pharmacy] pro- “a reinforcement that the solu- products, counseling and dis- added. “In that program, we’re among all drug store retailers. grams. They all have some- tions that we’re helping pro- ease management for diabetics demonstrating a lot of real Health Mart’s clinical and thing to offer,” he told Drug vide independent pharmacies in Health Mart stores — and benefits to the patients and the business support services are Store News. “I looked at the are enabling them to be suc- the Pharmacy Intervention pharmacies,” said McKesson what drew pharmacy own- overall picture: not only the cessful and to compete.” Program to boost patient com- spokeswoman Edie Devine. ers like Jonathan Marquess, strength in numbers, but the “We don’t have a specific pliance. More recently, the “The patient intervention ser- a Marietta, Ga.-based phar- quality of Health Mart’s pro- number for 2010,” Canning company has unveiled new vices have resulted in annual macist who operates three gram. I also liked that they added. “Our goal is obviously automation and clinical tools savings ranging from $500 Health Mart stores in the had a diabetes focus.”

11 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY2010 AA 50/ NNU50/NNUALAL2010 2010 REPREPOORTRT Co. puts a bull’s-eye on health and wellness

By Jim Frederick ciplined execution by teams across the company,” Stein- Stung by the steep drop hafel said. “Fourth-quarter in consumer discretionary retail segment performance spending last year, Target was well above our expecta- has shifted its retail strategy tions due to stronger-than- to focus harder on such ne- expected holiday sales, com- cessities as health and per- bined with well-controlled sonal care products and food inventories and disciplined — and less on such higher- expense controls.” margin but slower-moving Nevertheless, the anemic categories as apparel and sales growth picture raised electronics. It also revamped some muted alarms on Wall its circular advertising to Street, although faith in Tar- play up a value and low- get’s long-term potential price message on promo- and market strength remains tional items. rock-solid. Standard & Poors Responding to tough mar- noted the company’s “fairly ket conditions, Target also consistent earnings track re- has scaled back its store- cord, and its healthy balance construction schedule, from sheet and cash flow,” but a net addition of 46 new voiced “concerns over po- Target and 12 SuperTarget tential loss of market share stores last year to a plan for as a result of lackluster mer- just 10 new stores this year. chandising and aggressive However, the company also pricing by competitors.” revealed plans to remodel Despite those concerns, some 340 of its stores over noted S&P on March 13, the coming year. The goal, “we see Target weathering Target’s campaign to raise the visibility, drawing power and service levels at its in-store pharmacy departments continues to pay said chairman, president a challenging retail envi- dividends in customer loyalty. and CEO Gregg Steinhafel, ronment with its growing is “to improve sales, capture assortment of value-priced the company’s most recently market share and increase consumables, including new published annual report. He Headquarters: Minneapolis profitability in this challeng- and ‘up & up’ private-label called pharmacy a “key stra- 2009 sales: $65.4 billion* ing economic environment.” merchandise [encompassing tegic initiative” at Target. % change vs. 2008: 0.6% T ar g et The strategy appears to about 800 items across 40 On the pharmacy side, Tar- No. of stores: 1,740 have worked. Target reported categories], and the addition get is aggressively promot- No. of stores with Rx: 1,552 a 15.2% rise in per-share earn- of fresh food in new and re- ing such healthcare products ings for fiscal 2009, and net modeled stores.” as diabetes supplies in its Avg. store size: 110,000 sq. ft. earnings of $936 million for S&P also praised “steps circulars, along with its on- Rx sales: $2.9 billion the fourth quarter ended Jan. Target is taking to better going $4 pricing for 30-day % of sales from Rx: 4.6% 30, compared with $609 mil- align store assortments with supplies of many commonly Sales per store: $36.5 million lion for the same period last customer preferences and in prescribed generic drugs. * Total sales includes $63.4 billion in retail sales Source: Company reports, year. Fourth-quarter earnings matching competitors’ pric- Target also offers 90-day sup- and $1.9 billion in credit card services Drug Store News per share jumped 53.3% over ing.” Those steps are well plies of those me-too medi- the prior-year period. underway as Target chases cines at $10. the chain scored highest in a founding member in 2009 Sales, however, declined higher per-unit sales and The company also has pharmacy satisfaction levels of the Alliance to Make US 2.5% on a same-store basis, traffic. Its primary tool: a invested in pharmacy tech- among mass-merchandise Healthiest, a coalition whose although the chain’s sales new store design that fea- nology upgrades to boost retailers in the 2009 custom- goal is to boost the physi- momentum began to im- tures wider aisles, expanded efficiencies in the dispensing er satisfaction survey from cal and emotional health of prove in the final quarter of food assortments, improved process and drive a more in- J.D. Power and Associates. U.S. citizens within homes, the fiscal year ended Jan. 30. product adjacencies and a tegrated approach to patient With a total score of 831 out schools and the workplace. Total sales for the year were new pharmacy location at therapy and outcomes. of 1,000, Target outpolled In line with the move, Target up 0.9% to $63.4 billion, the front of the store. The company’s long cam- Costco, Sam’s Club, Kmart, pledged to “foster actions and thanks to contributions from “We ... intensified our ef- paign to raise the visibility, Walmart and other big-box policies that encourage and newer stores, including the forts to enhance the one- drawing power and service pharmacy rivals. sustain health,” and to pro- chain’s first stores in Alaska stop shopping convenience levels at its in-store phar- Internally, Target is using vide health and preventive- and Hawaii. we provide ... by continu- macy departments — 1,584 its market-bending clout to health benefits for its own “We’re very pleased with ing to expand our assort- of its 1,740 Target and Super- push both its employees and employees to “make it easier our fourth-quarter and full ment of food, pharmacy and Target stores have pharma- the nation as a whole toward and more affordable for all year 2009 financial perfor- household commodities in cies — continues to pay divi- healthier lifestyles that gen- Target team members and mance, which reflects sub- our general merchandise dends in customer loyalty. erate lower health costs. One their families to get and stay stantial innovation and dis- stores,” noted Steinhafel in For the third year in a row, example: the company was Continued on page 28

12 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Pushing through stunted sales with Rx, health By Alaric DeArment cept similar to Kmart, while declines in clothing sales. Sears Grand combines the But despite its problems in For many years, Kmart has mass-merchandise aspects of the sales arena, Kmart has cre- played second or even third Sears Essentials and Kmart ated several health and phar- fiddle to fellow nationwide with the traditional Sears de- macy initiatives at its stores. In mass-merchandise chains Tar- partment store format. May 2009, the store in Rehoboth get and Walmart, despite once For the year, revenues for Beach, Del., opened the chain’s having been the monarch of merchandise sales and ser- first retail clinic under a part- mass merchandising in the vices for Kmart were $15.7 nership with the Beebe Health United States. billion, compared with $16.2 Center. The clinic includes two The chain was a relative billion in 2008. Sales for Sears exam rooms and is staffed by bright spot amid the woes of Holdings were $44 billion, a nurse practitioner, as well as parent company Sears Hold- compared with $46.8 billion in an on-call physician. In June In July 2009, Kmart introduced a savings club in which eligible mem- ings in 2009, as comparable- 2008. ’ fourth- 2009, the chain introduced the bers received $10 gift cards and $100 gift cards in return for a $10 enrollment fee and store sales increased by 1.7% quarter 2009 profits were $430 Smart Assist Savings Card the transferring of four prescriptions to the store. in the fourth quarter. But million, compared with $190 for unemployed residents Kmart still had its share of million in fourth-quarter 2008, in Michigan, providing dis- Headquarters: Hoffman Estates, Ill. problems, largely due to the while profits for the year were counts of 20% on more than 2009 sales: $15.7 billion economic recession. In the sec- $235 million, compared with 1,200 private-label pharmacy % change vs. 2008: -3% K mart ond, third and fourth quarters $53 million in 2008. The small- and grocery products for up to No. of stores: 1,327 of fiscal 2009, Sears Holdings er full-year numbers were due six months. And in July 2009, No. of stores with Rx: 1,021 announced the closures of 43 to large quarterly losses in Kmart launched a prescription Avg. store size: 93,000 sq. ft. Kmart stores. The company 2008 and 2009 that offset prof- drug savings club, charging a also announced that it would its for the years as a whole. The $10 enrollment fee for eligible Rx sales: $2.5 billion shut down five Sears Essen- company said Kmart’s gains members in exchange for $10 % of sales from Rx: 16% tials and Sears Grand stores. largely were driven by in- gift cards and $100 gift cards Sales per store: $11.8 million Sears Essentials is a mass- creased sales in toys and home for customers who transferred Source: Company reports, Drug Store News merchandise pharmacy con- products, but were offset by four prescriptions to the store. A ‘solution for sick; destination for healthy’ By Michael Johnsen Steve Youngman as EVP mer- tion for the healthy,” Chris chandising to help streamline Dimos, Supervalu pharmacy What were once 13 distinct procurement and merchan- president, recently told Drug and autonomous grocery dising initiatives. Now, not Store News. “We work very banners — Acme, Albert- only will the actual buying closely in the pharmacy sons, Shaw’s, to name a few decision be made in Eden group with our grocery teams — are operating more as one Prairie, Minn., planograms to deliver a whole, health-fo- central retailer. It’s the super- created at headquarters also cused shopping ex­­perience.” fusion of the company, Su- will be homogenous across all Supervalu’s health-and-well­ pervalu CEO Craig Herkert of Supervalu’s stores, no mat- ness offerings cut across recently told analysts, a fu- ter what the banner. three platforms: diabetes care, sion that will afford the com- “With the start of the new medication therapy manage- pany greater synergies with year, I want you to know ment and preventative care, As Supervalu continues to fuse its 13 banners, which include discount footprint Save- A-Lot, it will continue to emphasize its pharmacies as a “solution center for the sick and a buying power that can be that I’m approaching fiscal which encompasses immuni- a destination for the healthy.” efficiently leveraged across 2011 optimistically,” Herkert zations, weight management a supply chain that serves told analysts during a sepa- and health screenings. Headquarters: Eden Prairie, Minn. not only its 2,350 owned lo- rate third-quarter conference “[In the coming] year, cations, but also some 1,900 call this January. “This isn’t we’re looking to continue 2009 sales: $41.9 billion* independent grocers. because I see a robust pick- the focus on heart-health % change vs. 2008: -5.9% The super-fusion of the up in the economy, because awareness, and add compo- No. of stores: 2,350 company also will make it frankly I don’t. It is because nents around preventing and al u No. of stores with Rx: 850 easier for vendors to approach I believe Supervalu is run- delaying diabetes so those Avg. store size: 60,000 sq. ft. Supervalu. “We need to be ning its business better, and people who are prediabetic Rx sales: $2.0 billion less complex for our suppliers that means we’re in control or have the risk factors to to talk to; we are clearly the of our own destiny.” become diabetic [can partici- % of sales from Rx: 5.8% most complex large grocery Meanwhile, Supervalu’s pate],” Dimos said. Sales per store: $14 million in America today to talk to,” pharmacy operations will For example, Supervalu

S u per v * Total sales for the fiscal year ended Feb. 27 Source: Company reports, Herkert acknowledged. Su- continue to emphasize the currently conducts healthy include $32.9 billion in retail sales and $9 billion Drug Store News in supply chain services pervalu recently brought on pharmacy as a “solution cen- store tours through more than board 20-year Kraft veteran ter for the sick and a destina- 400 Supervalu locations.

13 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Fusing a franchise with indie Rx service By Alaric DeArment Shoppe pharmacy, indepen- counseling. In October 2008, dents can acquire brand recog- it began offering year-round Since pharmacist Michael nition where they previously vaccinations for influenza, Busch opened a pharmacy in may have had none, as well as pneumonia and shingles, as St. Louis in 1968 and dubbed a full range of services usually well as seasonal and travel it The Medicine Shoppe, available at the chain stores. vaccinations, administered the business he started Also in summer 2009, MSI by pharmacists trained and has evolved into Medicine parent company Cardinal certified by the American Shoppe International, a glo­ Health moved MSI’s head- Pharmacists Association. bal franchising system of quarters from St. Louis to The company also has run more than 1,200 stores in Dublin, Ohio, where Cardi- into some problems recently, locations ranging from the nal is based. however. In March, seven United States and Canada to Despite the small footprint franchisees representing Becoming a Medicine Shoppe pharmacy can give independents brand recognition and a Taiwan and Dubai. of its stores, MSI has ex- more than 600 U.S. Medicine slew of services usually only available to chain stores.

Unlike traditional retail panded the services that the Shoppe and Medicap phar- In pharmacy chains, Medicine stores offer. Two years ago, it macies filed a class-action Headquarters: Dublin, Ohio Shoppe stores operate under opened its 100th Specialized lawsuit against MSI, Medi- ter 2009 sales: $1.56 billion* M e d ici n a franchise agreement that al- Care Center for diabetes pa- cap and Cardinal Health, Sh o ppe lows them to maintain their tients, part of a program de- alleging that Cardinal tried % change vs. 2008: -7.8%* independence while using signed to help patients better to push them into a an agree- No. of stores: 708* n the Medicine Shoppe or Med- understand their illness and ment whereby the company No. of stores with Rx: 708* ati icap brand. As of March, there comply with physicians’ rec- took in “tens of millions” of Avg. store size: 1,800 sq. ft. were 708 Medicine Shoppe ommendations. The compa- dollars but reduced services on and Medicap stores in the ny provided diabetes man- despite not reaching its goal Rx sales: $1.48 billion* United States, with most op- ager certification to nearly of getting 95% of stores to ac- % of sales from Rx: 95% erating under the Medicine 200 pharmacists to help sup- cept the arrangement. MSI Sales per store: $2.2 million* al Shoppe brand. port the program, allowing has dismissed the lawsuit as * U.S. stores only Source: Drug Store News By becoming a Medicine them to offer education and having “no merit.” Grabbing ‘Ahold’ of Rx with ‘Giant’ initiatives The economic recession and under the Giant of-the-industry” 97,700-sq.-ft. saw a number of supermar- and Martin’s Food Markets store in Susquehanna Town- ket pharmacies run into fi- banners, and plans to change ship with a full-service phar- nancial difficulty. the Ukrop’s stores to the Mar- macy that included informa- Ukrop’s, based in Rich- tin’s banner starting in April. tion on healthy living, drugs, mond, Va., had some prob- Royal Ahold also operates disease and diet, and a drive- lems of its own, though not Giant of Landover, Md. — through pharmacy. necessarily because of the re- which has stores in Maryland, Stop & Shop and Giant- cession. The chain lost its top and Virginia — and Landover haven’t expanded place in the Richmond market Stop & Shop, based in Quin- as much, though Giant- to , owned by Bel- cy, Mass., which operates in Landover spent 2009 reno- gium’s , pri- New England, New York and vating nine stores with such marily due to its long-stand- . features as digital deli kiosks ing practices of closing on Ahold’s U.S. stores had and prepared foods, and Royal Ahold owns Giant Stores of Carlisle, Pa., which operates 177 stores in Pennsyl­ Sundays and keeping alcohol 2009 sales of $23 billion, in- opened a new store in Ti- vania, Virginia, and Maryland. off its shelves — policies im- cluding $17.9 billion at Stop monium, Md., in June. Both posed by its deeply religious & Shop and Giant-Landover, banners have offered a num- owners, the Ukrop family. and $5 billion at Giant-Carl- ber of pharmacy initiatives, Headquarters: Amsterdam, The Netherlands Rather than compromise their isle. Despite its smaller size, including $15 H1N1 flu vac- 2009 sales: $22.9 billion* beliefs and change the stores’ Giant-Carlisle has expanded cinations, $10 seasonal flu % change vs. 2008: 5% policies, the Ukrops decided rapidly over the past year. vaccinations and the contin- No. of stores: 561 instead to sell the chain. In addition to the Ukrop’s uation of a program to offer No. of stores with Rx: 548 The company that bought acquisition, it has opened free antibiotics to patients. Avg. store size: 55,000 sq. ft. 25 Ukrop’s stores in Rich- nine new supermarkets in Meanwhile, the Giant-Car- mond and Williamsburg, Va., , six of which lisle store in Hazleton, Pa., Rx sales: $2.12 billion

A h o l d for $140 million, has thrived. include pharmacies, includ- announced in April 2009 that % of sales from Rx: 9.3% Giant Stores of Carlisle, Pa., ing a Martin’s store opened it would offer Merck’s shin- Sales per store: $40.8 million owned by Royal Ahold, oper- at the beginning of March in gles vaccine Zostavax (zoster * U.S. stores only Source: Drug Store News ates 177 stores in Pennsylva- Altoona. In October, Giant- vaccine live) to people ages nia, Virginia, West Virginia Carlisle opened a “state- 60 and older.

14 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT As two cos. United, so arose a powerhouse By Jim Frederick of scale and giving indepen- United Drugs has one of the dent members more buying strongest managed care pro- It was a merger of equals, clout with suppliers. It also grams out there,” Semingson and it spawned a more pow- created a drug store network said. Copeland added, “With erful drug store network with with operations in every state this strategic move, we’re national reach. In June 2009, except North Dakota, and confident we will become the United Drugs and Associated brought API’s distribution cen- strongest co-op of independent Pharmacies merged their two ter into the mix, allowing Unit- pharmacies in the nation.” organizations, spawning a ed members to take advantage Contributing to the syn- new pharmacy powerhouse of more coordinated buys and ergies is the fact that AAP of 2,000 independent drug vendor discounts. Both compa- signed a new supply agree- stores operating under a new nies also are sharing best prac- ment in January with Cardi- corporate entity: American tices in such areas as technol- nal Health. Now under de- In June 2009, United Drugs and Associated Pharmacies merged to become American Associated Pharmacies. ogy and merchandising. velopment, AAP spokesman Associated Pharmacies, which boasts a 2,000-member base of independent drug stores. The combination of Phoe- Both companies continue to Brett Doucette said, are a new nix-based United Drugs and operate under their own logos. integrated pharmacy Web Headquarters: Phoenix Scottsboro, Ala.-based API Named president and CEO of site, set for launch in April, as 2009 sales: $3.8 billion was a timely bow to the rea­ the combined company was well as enhancements to the lities of a fractured, Darwin- Jon Copeland, CEO of API. Medicare prescription claims % change vs. 2008: 100% ian marketplace. Independent United CEO Bruce Semingson process and expanded clini- No. of stores: 2,000 AAP pharm­acy owners are particu- has taken the added role of cal services provided by AAP No. of stores with Rx: 2,000 larly at risk in tough economic COO for AAP. pharmacies. “We’re going to Avg. store size: 2,000 sq. ft. times, and they are far stron- Both men described the two continue to develop [medica- Rx sales: $3.5 billion* ger together than apart. companies as highly compat- tion therapy management] % of sales from Rx: 92% The merger carried benefits ible. “API is known for run- programs with some of the for both groups. It’s helping to ning one of the nation’s most universities, including the Sales per store: $1.9 million * Following the merger of United Drugs and Associated streamline costs for both orga- successful cooperative-owned University of Arizona,” Dou- Pharmacies to form American Associated Pharmacies Source: Drug Store News nizations, boosting economies warehouse operations, and cette told Drug Store News. No sign of recession as chain expands, profits By Alaric DeArment pharmacy Vic Curtis told Drug items common at other Costco Store News. It immediately stores, such as large dog food Though the weak economy began testing the program at bags and patio furniture. has delivered a punch in the three stores. Prescriptions for The store’s lo- nose to businesses across the specialty drugs dropped off in cation created another chal- United States, Costco, never- one of those stores are sent to lenge: a lot of customers with theless, has remained profit- a central fill location and then limited or no English-speak- able, with 2009 global sales are sent back to the original ing skills. As required by law, and profits of $69.89 billion store. As of mid-March, Cost- the pharmacy has Language and $1.09 billion, respectively, co rolled out the system to 50 Line, which allows speakers compared with $70.98 billion warehouses around the coun- of numerous languages to and $1.28 billion in 2008. The try. The company’s central fill receive translation services Issaquah, Wash.-based mass operation, under partnerships from trained staff using a merchandiser also saw an in- with AmerisourceBergen and special telephone with two crease in sales and profits dur- McKesson, now serves about receivers. “One of the things In June 2009, Costco launched Costco Specialty Pharmacy Services in three stores before expanding the program to 50 stores. ing second-quarter 2010, with 45% of warehouses and ac- we do is have Spanish-speak- $18.39 billion in sales and $299 counts for around 26% of total ing employees,” regional Headquarters: Issaquah, Wash. million in profits, compared prescriptions filled. pharmacy manager for the 2009 sales: $56.5 billion* with $16.49 billion and $239 Of particular note also was Northeast Tom Drougas said. million in second-quarter 2009. Costco’s store in New York “That’s always a plus.” % change vs. 2008: -0.88% The chain also has seen a City’s Manhattan, which Recently, Costco has seen No. of stores: 407 lot of expansion. In fiscal 2009, opened in December 2009. The some changes at the top No. of stores with Rx: 407 which ended in August 2009, store, in the densely populated as well. In February, Craig Avg. store size: 142,000 sq. ft. Costco reported 407 ware- neighborhood of Spanish Har- Jelinek, who served as EVP Rx sales: $1.4 billion houses; as of the middle of lem, is unusual, considering merchandising for the com- % of sales from Rx: 2.5% March 2010, that number was that most of the chain’s U.S. pany for six years, and Cos tc o † 414, of which 407 had in-store warehouses are in sprawling worked in various manage- Sales per store: $139 million pharmacies. In June 2009, the suburbs and rural areas. For ment positions at Costco for * U.S. stores only Source: Company reports, † Based on fiscal year 2009 U.S. sales and 407 store count Drug Store News company started Costco Spe- that reason, the size was pared 20 years, was promoted to cialty Pharmacy Services, VP down, and it doesn’t carry president and COO.

15 • April 19, 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Pharmacy grows as expansion slows By Mike Troy a timely basis and customers high-value customer base. Ac- are reminded with a phone cordingly, there is a robust on- The pace of growth may call when they are ready to be line library of diabetes-related have slowed last year at Pub- picked up. The company also content, including education- lix, but recent actions on the offers free 14-day prescriptions al articles, interactive tools part of the Southeast’s leading of commonly prescribed anti- for risk assessments, quizzes, supermarket operator indicate biotics, a program developed podcasts and videos at Pub- the company hasn’t wavered to counter mass merchants’ $4 lix.com/diabetes. Customers in its commitment to wellness generic programs. also are encouraged to sign- and pharmacy. “As both a supermarket up and receive a monthly e- The most recent example and pharmacy, Publix is the newsletter, which will contain involves a new diabetes man- ideal setting in which to pro- additional diabetes-related ar- agement system designed to mote healthy living,” said Ma- ticles, a featured recipe of the assist customers and Publix ria Brous, Publix media and month and special offers from Publix recently launched a diabetes management system designed to assist customers and employees living with diabetes community relations director. Publix and Publix Pharmacy. employees living with diabetes. to manage their medication, “We are uniquely positioned Included in the program is compliance, monitoring, edu- to educate our customers and a voucher for a free Publix Headquarters: Lakeland, Fla. cation, nutrition and exercise. associates on the nutritional brand glucose meter. 2009 sales: $24.3 billion The key component of the pro- aspects of living with diabe- By making it an indispen- % change vs. 2008: 1.6% Pu bli x gram involves free metformin, tes. As a grocer of choice for so sible component of its diabetic No. of stores: 1,017 the generic version of Gluco- many, we saw an opportunity customers’ lives, Publix’ over- phage, in 500 mg, 850 mg or to better serve the health and all business stands to benefit No. of stores with Rx: 803 1,000 mg dosages. Pharmacy maintain the wellness of those and more than offset the ex- Avg. store size: 46,000 sq.ft. customers also can have all learning to live with and man- pense of giving away metfor- Rx sales: $1.5 billion their maintenance medications age their diabetes.” min. Publix already is regard- % of sales from Rx: 6% enrolled into the Publix Auto The wide-ranging diabetes ed as the leading food retailer Sales per store: $23.9 million Refill program, which ensures program is designed to make in the Southeast and enjoys a Source: Company reports, Drug Store News prescriptions are refilled on Publix a valuable resource to a Continued on page 29 Era of execution begins for warehouse club Sam’s Club rolled into 2010 pharmacy is visible to those initiative called Project Port- looking to execute against entering the building. folio that bears many simi- a broad range of strategies While the physical layout of larities to the Project Impact undertaken by new senior the pharmacy and its signifi- initiative implemented by leadership during the past cance to Sam’s value propo- Walmart four years ago. year that will go down as the sition hasn’t changed, many Project Portfolio involves most disruptive in the com- other aspects of the company club-level merchandising and pany’s 28-year history. have, beginning with the ap- operational changes designed Even so, largely untouched pointment of Brian Cornell as to improve the productivity by the extensive changes was president and CEO one year of existing units. For example, Sam’s Club’s pharmacy op- ago. Cornell held the same po- selling space is being expand- eration, which remains an es- sition at arts and crafts retailer ed for such growth catego- sential component of the val- Michaels, and he filled a posi- ries as baby, over the counter ue proposition for members tion vacated by Doug McMil- and health and beauty, along who pay fees ranging from lon, who Walmart tapped to with such fresh categories as Sam’s Club pharmacy occupies prime real estate at the front of the store next to the $35 to $100 to shop at Sam’s. lead its international division. produce, meat, bakery and checkout, so that it is visible to all customers. Pharmacy continues to oc- One of Cornell’s first acts meal solutions. Meanwhile, cupy real estate that is among was to name Linda Hefner less space will be available for Headquarters: Bentonville, Ark. the most valuable in the club, as EVP merchandising and such categories as large appli- 2009 sales: $46.7 billion even though some recent replenishment. Hefner, a for- ances, sporting goods, furni- % change vs. 2008: -0.4% adjustments to the merchan- mer Kraft and Sara Lee exec- ture, movies/DVDs, seasonal No. of stores: 596 dising philosophy have im- utive, had spent the previous and apparel. No. of stores with Rx: 519 pacted other departments. two years as EVP and gen- “The merchandising lead- Avg. store size: 133,200 sq. ft. The pharmacy, as well as the eral manager of Walmart’s ership team has also devel- adjacent and slightly expand- home business, where she oped individual category Rx sales: $1.2 billion ed health and beauty depart- led a transformation involv- strategies aligned with the % of sales from Rx: 2.5% ments, are typically located at ing a focus on proprietary portfolio strategy,” Heffner Sales per store: $78.3 million the front of clubs adjacent to brands. Cornell, Hefner and said earlier this year in a Sam ’s C l u b Source: Company reports, Drug Store News the checkout area with promi- EVP operations Ignacio Per- memo describing a restruc- nent signing that ensures the ez now are spearheading an Continued on page 29

16 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Filling a niche with infusion of specialty Rx By Alaric DeArment toid arthritis, and such viral in- places where patients can pick fections as hepatitis C and HIV. up their prescriptions and con- As large drug makers like In January, BioScrip became sult one-on-one with pharma- , Merck and Eli Lilly in- one of the largest home-infu- cists on dosing, drug selection, crease their focus on therapies sion services providers in the compliance and other issues. to treat such complex and country with the acquisition “The level of medication chronic illnesses as cancer of Critical Homecare Solutions knowledge and pharmacy and autoimmune disorders, for $343.2 million in cash and skill available through Bio- an emerging species of retail stock. The purchase expanded Scrip is well beyond that of- pharmacy may be poised for its home infusion and home fered and available by a retail some major growth in the healthcare services division by pharmacist who operates in- near future. 35 specialty infusion pharma- side a big-box store,” BioScrip Since it was founded in cies, including 16 ambulatory chief procurement officer Bob 2005 through the merger of treatment centers and 33 nurs- Roose told Drug Store News. At BioScrip’s 33 community pharmacies, patients can pick up prescriptions and discuss dosing, drug selection, compliance and other medication specialty issues. MIM and Chronimed, Bio- ing locations, bringing the to- The company’s specializa- Scrip has quickly positioned tal to 110 locations nationwide. tion attracted the attention of itself as a leader in specialty The company also operates Teva Pharmaceutical Indus- Headquarters: Elmsford, N.Y. pharmacy. Unlike traditional 33 community pharma- tries’ neuroscience business 2009 sales: $1.3 billion* B i os crip retail pharmacy, specialty cies, many of which look like in September 2009. The com- % change vs. 2008: -7% pharmacy is geared toward typical corner drug stores. pany became one of several No. of stores: 33 dealing with conditions that One of the pharmacies located selected to participate in TOP No. of specialty community stores with Rx: 33 require complex and expen- in ’s Chelsea MS, a research study of multi- sive medication therapies neighborhood stocks a num- ple-sclerosis patients designed Avg. specialty community store size: 2,621 sq. ft. † — and a lot of consultation ber of over-the-counter drugs to collect information about * Total sales include $1.1 Rx sales: $450 million billion specialty pharmacy, † between the patient and phar- and supplements, while oth- quality of life, symptoms, re- $216.2 million traditional % of sales from Rx: 15% macies — including cancers, ers sometimes stock maga- lapse, employment, activity pharmacy sales Sales per store: $13.6 million† † Reflects sales in retail such autoimmune disorders as zines and consumables. But participation and health activ- pharmacy stores only Source: Drug Store News multiple sclerosis and rheuma- overall, the pharmacies are ity for two years. Taking one ‘Giant’ step at a time to Rx-cellence By Michael Johnsen the free antibiotics program added to prescription receipts has resulted in the addition — when scanned, a blind Giant Eagle has been quite of more than 135,000 new prompt is created for the team busy in the past year, especially pharmacy customers to Giant member to enter that date. across its pharmacy operations. Eagle and more than 1.8 mil- And late last year, Giant Ea- The Pittsburgh supermar- lion new scripts from current gle put into motion its HBW ket chain earlier this year an- pharmacy customers. pilot tests — a new store- nounced that its free antibi­ The Institute for Safe Medi- within-a-store format that otics program, launched in cation Practices also recently helps meld the pharmacy and September 2009, has resulted recognized the supermarket food store together for the ev- in more than $3 million in free retailer’s pharmacy for its ef- eryday shopper. prescriptions for customers forts in ensuring high-quality Weaving it all together are in the company’s four-state customer service and accu- Giant Eagle’s healthcare pro- operating area. racy. Giant Eagle had imple- fessionals — the pharmacist, a “Giant Eagle launched our mented two quality initiatives. pair of full-time dieticians and Giant Eagle’s free antibiotics program earned the chain more than 135,000 new phar- free antibiotics program as part No Defects Passed Forward on-site nutritionists, and li- macy customers and more than 1.8 million new scripts from existing food customers. of our commitment to improv- encourages staff to identify censed aestheticians — many ing the health and wellness of potential errors at each stage of whom not only are avail- Headquarters: Pittsburgh our communities,” stated Gi- of the prescription-filling pro- able for questions to the casual 2009 sales: $8.2 billion ant Eagle VP pharmacy Randy cess. In addition to preventing shopper, but also participate % change vs. 2008: 2.5% Heiser. “We are very pleased medication errors, creating in scheduled educational ses- g le No. of stores: 220 to see such great customer ac- that culture of accountability sions or healthy-food-shop- No. of stores with Rx: 210 ceptance and confidence in Gi- also helps improve customer ping walk-throughs. “Having ant Eagle pharmacy to deliver service, Heiser noted. in-store dieticians allows us Avg. store size: 80,000 sq. ft. these vital prescriptions for The second program pre- to bridge that gap [between Rx sales: $1.1 billion children and adults.” vents point-of-sale errors pharmacy and food store],” % of sales from Rx: 13.3% To date, Giant Eagle has by linking the pharmacy Joshua Shapira, Giant Eagle Sales per store: $37.3 million filled more than 590,000 pre- dispensing system to the director of health and well-

Gia n t E a Source: Drug Store News scriptions for free antibiotics. registers. A bar code with a ness and architect of the pro- Across all of its pharmacies, patient’s date of birth was gram, told Drug Store News.

17 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Combo chain is ally for hard-pressed Texans By Jim Frederick combo store chain is holding firm. prescription benefit insurance program or are limited H-E-B has built a virtually impregnable market in the amount of governmental assistance they can In the maelstrom of economic hardship and position in the Lone Star State, generating annual receive,” noted a pharmacy source at the company. health reform, Texas’ leading supermarket and sales that now exceed $15 billion, and pharmacy “Our pharmacies offer customers so much sales in excess of $1 billion. Newcomers, be they more” than prescription services, H-E-B reported, Headquarters: San Antonio food, drug or mass merchants, have learned they including flu shots, immunizations and health 2009 sales: $15 billion* can operate alongside H-E-B but they’ll never screenings. Besides employing hundreds of in- % change vs. 2008: NA overpower the hometown favorite. The company store pharmacists, the company noted, “H-E-B No. of stores: 338* works to drive its “No Store Does More” message also offers nontraditional career paths in disease No. of stores with Rx: 210 through its more than 300 supermarkets and com- state management, central fulfillment, call center bo stores with in-store coupons, free products and and immunization programs.” The goal for H- Avg. store size: 65,000 sq. ft. a focus on supporting local growers. E-B pharmacists, added the company, is to “lead

H-E- b Rx sales: $1.1 billion H-E-B now operates more than 200 in-store phar- the charge in creating a team environment that is % of sales from Rx: 7% macies throughout its home state, offering “a variety responsive and even exceeds our patient’s expec- Sales per store: $48 million of health services,” including free screenings for dia- tations through the delivery of excellent, accurate * Includes 29 Mexican stores Source: Drug Store News betes and cholesterol and “competitive pricing, espe- and efficient service.” cially for our customers who do not have access to a Continued on page 29 Grocer gains healthcare partners to polish Rx y ntoinette lexander B A A A lbert sons In an effort to better partner with its patients, Headquarters: Boise, Idaho Albertsons has a new pharmacy management sys- Grocer Albertsons continues to focus heavily on tem through an agreement with PDX and affiliates 2009 sales: $3.37 billion pharmacy and health and wellness, as evidenced by Rx.com and the Nationwide Health Information Net- % change vs. 2008: -11% its new pharmacy management system. work. The implementation of the Rx.com electronic No. of stores: 222 pharmacy record facilitates complete chainwide No. of stores with Rx: 211 drug utilization review checking, and allows patients Avg. store size: 55,000 sq. ft. the convenience of shopping at any Albertsons phar- Rx sales: $843 million macy. In addition, NHIN provides submissions, rec- onciliations and collections services for Albertsons. % of sales from Rx: 25% The company noted that its Rx-tra Savings pro- Sales per store: $15.2 million gram, launched in October 2008, is well-received and Source: Drug Store News continues to grow. The program provides pharmacy patients with discounts on all generic and brand- a provider of mobile medical screenings. There name medications, and offers up to a 30-day supply were more than 80 clinics scheduled in March and of more than 500 generic medications for $4.99 and April. HealthFair clinic screening packages include Albertsons has partnered with PDX, Rx.com and the Nationwide Health up to a 90-day supply for $10.99. heart disease prevention, stroke and aneurysm pre- Information Network to develop a new pharmacy management system. Albertsons continues to partner with HealthFair, vention, prostate cancer, cholesterol and diabetes. Building a bridge between retail, specialty Rx By Alaric DeArment including a Midwest supermarket pharmacy chain. Hy-Vee announced in January that it would A growing number of retailers are discovering start a partnership with Omaha, Neb.-based Am- the benefits of offering specialty pharmacy services, ber Pharmacy to offer specialty services through- out Hy-Vee’s retail stores in a joint venture called Headquarters: West Des Moines, Iowa Hy-Vee Pharmacy Solutions. The aim is to create a 2009 sales: $6.4 billion single point of contact to handle patients’ pharma- % change vs. 2008: 3.2% cy needs, including medication therapy manage- No. of stores: 228* ment and access to diet and nutrition services. Hy- Vee said the venture, headquartered in Omaha, Patients can choose between picking up their prescriptions at a Hy-Vee pharmacy or having them delivered to their home, office or other location. No. of stores with Rx: 222* eventually would provide services to customers

- Vee Avg. store size: 70,000 sq. ft. in all of the eight states in which Hy-Vee operates. patients with complex healthcare needs.” Rx sales: $864 million “Hy-Vee Pharmacy Solutions builds a bridge Services include a phone service offered 24

H y % of sales from Rx: 13.5% between two different segments of the pharmacy hours a day, seven days a week with live personal Sales per store: $28 million business,” said Bob Egeland, Hy-Vee VP pharma- care coordinators, and the option of having spe- cy operations. “We’re bringing together experts cialty medications made available for pickup at * Includes 202 supermarkets and 26 stand-alone drug stores Source: Drug Store News from retail pharmacy and specialty pharmacy to a Hy-Vee pharmacy or delivered to a customer’s offer more convenient, personalized service for home, office or other location.

18 • April 2010 DrugStoreNews.com Drug Store News RETAIL News & analysis 2010PHARMACY A 50/NNUAL2010 REPORT Grocer remodels, connects to consumers

By Michael Johnsen boom in the aftermath of Hurricane Katrina. So it’s only fitting that a grocer navigating post- Winn-Dixie in February opened its first new store bankruptcy waters would open its new store in a since 2004 in Covington, La. Covington is a commu- community that has weathered the devastation of nity that has experienced a significant population Katrina. And it’s a store that has an opportunity to serve as a beacon toward recovery. Because once the economy begins picking up again, Winn-Dixie will Headquarters: Jacksonville, Fla. be able to go back on offense with its extensive model 2009 sales: $7.4 billion program, already a major push in the company. Year- % change vs. 2008: 1.2% one remodels had a 4.9% weighted average sales in- No. of stores: 515 crease, excluding the grand reopening phase, and a No. of stores with Rx: 401 lift of 4.1% in transaction counts, Peter Lynch, Winn- In February, Winn-Dixie opened its first store since 2004 in Covington, La. Avg. store size: 46,800 sq. ft. Dixie president, CEO and chairman, told analysts in February. Through June, Winn-Dixie will have re- patients to access their own records online. “That’s Rx sales: $663 million modeled 60 stores, Lynch noted. kind of unique in the food store industry,” John Fe- % of sales from Rx: 9% Across pharmacy, Winn-Dixie recently rolled out gan, Winn-Dixie VP pharmacy, told Drug Store News. Sales per store: $14.3 million its WD RxConnect program, which will link the “Under the WD RxConnect program, a patient can W i nn- Di x ie Source: Company reports, Drug Store News chain’s 401 pharmacies through a centralized pre- walk in and look up their medication history online scription record system. The same system also allows and see what they’re taking.” Quality ‘FastCare’ with a personal touch By Alaric DeArment cist-administered immunization training to all of its pharmacies. Like many chains, Shopko has added a Headquarters: Green Bay, Wis. 2009 sales: $2 billion When one hears “mass-merchandise retailer,” the personal touch to dealing with its customers, launch- Sh o pk next words that come to mind are likely a combination ing an interface with and expanding % change vs. 2008: -1% of Walmart, Target and Kmart. But though Shopko its persistency and compliance programs to include No. of stores: 141* might not enter the consciousness of those who don’t letters, point-of-sale and telephone calls. No. of stores with Rx: 140 live in a city with a Shopko store, the chain has made Following the appointment of W. Paul Jones as Avg. store size: 80,000 sq. ft. it a mission to stay on the cutting edge of the industry. CEO last March, Shopko followed up with the April On the heels of its expansion in 2008 and 2009, appointments of Mike Bettiga as EVP and COO, Rx sales: $590 million o when it opened four new Shopko stores and two while Jill Soltau became EVP and chief merchandis- % of sales from Rx: 28% new Shopko Express stores, the company also has ing officer. Bettiga assumed responsibility for store Sales per store: $15 million expanded its retail clinic business and now has a to- operations, legal, real estate and logistics. Soltau * Includes five Shopko Express stores Source:Drug Store News tal of 22 FastCare Clinics. It also completed a 22-store began working as an SVP and GMM apparel and pilot program of having its pharmacists administer accessories in 2007. to the position of SVP and GMM apparel and acces- immunizations, and has since rolled out the pharma- In October 2009, the company promoted Jeff Csuy sories, Soltau’s former position. Mail-order launch sends co. into new year By Antoinette Alexander cus on improving business. Filling the role of president and CEO, as of Feb. 8, is Ron Marshall, The Great Atlantic and Pacific Tea Co. kicked who succeeds executive chairman Christian off 2010 with a new leader at the helm and a fo- Haub, who had been serving as interim CEO. According to A&P, the fit made sense not only Headquarters: Montvale, N.J. because Marshall understands the Northeast 2009 sales: $9.3 billion* marketplace, but also because he has broad ex- * perience in the retail industry, including food re- % change vs. 2008: -2.1% tail. His previous experience includes serving as No. of stores: 435 president and CEO at Borders Group, as the CEO No. of stores with Rx: 251 of Nash Finch and previously as EVP and CFO Avg. store size: 42,200 sq. ft. of . As Marshall settles into his new role, there’s

A&P Rx sales: $585.9 million* no doubt that the company has its sights fixed Pharmacy continues to be a significant focus for A&P, as the company % of sales from Rx: 6.3%* operates about 250 retail pharmacies. on improving the business. As with many food Sales per store: $21.4 million retailers, the challenging economy has taken As explained in the third-quarter confer- * Projected; fiscal year 2009 ended Feb. 28, 2009, results not available at press time its toll on A&P. The good news is that A&P has ence call with analysts, the grocer is working Source: Drug Store News identified areas that need improvement and is to simplify its promotions and improve pricing. working to make the necessary changes. Continued on page 28

19 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Pharmacy front boosts chain’s traffic, sales By Michael Johnsen counter for 2010 and beyond. One of those initiatives — credited for driving According to Bruce Efird, Fred’s CEO, 2009 was significant foot traffic — is the migration ofits a rebuilding year, and the programs Fred’s cur- pharmacy department to the front of the store. rently is executing have better positioned the dis- Efird noted that test stores featuring front-of-store pharmacies enjoyed 20% higher sales-per-sq.-ft. as Headquarters: Memphis, Tenn. compared with the company’s average. 2009 sales: $1.8 billion For the year, Fred’s opened six new stores % change vs. 2008: -1.0% and closed nine stores for a net store count loss No. of stores: 669 of three. However, the company opened nine No. of stores with Rx: 307 express pharmacy locations and 17 additional Avg. store size: 18,300 sq. ft. pharmacies. After factoring in three pharmacy closures, that’s a net gain of 23 pharmacies. And Rx sales: $599 million Moving the pharmacy to the front of the store proved to be a strong Fred’s is preparing for another 20 to 25 pharma- traffic driver for Fred’s. F re d’s % of sales from Rx: 33.5% cies in the coming year. Sales per store: $2.7 million Fred’s Prescription Plus program — a prescrip- has proven to be a strong traffic driver for phar- Source: Company reports, Drug Store News tion discount initiative — has signed 160,000 macy in 2009,” he said. The company’s immuniza- members to date, Efird reported. “This program Continued on page 30 Bringing health innovation to remote locales

By Alaric DeArment Headquarters: Gouverneur, N.Y. K i 2009 sales: $743 million* nn Northern New York state and Vermont bear a re- moteness that becomes apparent upon first glance, % change vs. 2008: 4.4% ey Dr with sparsely populated towns surrounded by No. of stores: 91 woodlands. But inspite of that, a local regional retail No. of stores with Rx: 91 pharmacy chain has a history of delivering innova- Avg. store size: 10,800 sq. ft. tive services that rival those of many national chains. Rx sales: $568 million ugs Kinney Drugs, based in Gouverneur, N.Y., has % of sales from Rx: 76% spent the last year offering numerous new health initiatives, and has busied itself opening new Sales per store: $8.2 million Local regional operator Kinney Drugs has busied itself opening new * Reflects retail sales as well as revenue from pharmacy benefit stores. In March, it opened a store in Waterbury, Vt., stores in northern New York state and Vermont. management companies, mail order and long-term care business units. a former Vincent’s Drug & Variety store that it had Source: Drug Store News purchased from owner John Vincent in January. sultation area and clothing. The Ithaca store’s open- Kinney also had opened a 12,300-sq.-ft. store ing followed the May 2009 re-opening of a remod- But health-and-wellness initiatives have really at the end of 2009 in Ithaca, N.Y., that included a eled store in Barre, Vt., which featured widened defined Kinney’s business. Also in March, it put drive-through pharmacy window, pharmacist con- aisles and expanded front-end offerings. Continued on page 30 Pushing Rx to help employers ‘Be Well’

By Mike Duff veloped with the market in mind, but it Park, another Chicago suburb. Frank Guglielmi, a could be popping up in more locations as Meijer Meijer spokesman, said the pharmacy is similarly Meijer has launched a new, smaller prototype explores the strengths of its operations in more located to the retailer’s supercenters. “It’s still up that provides pharmacy with a higher operational densely populated geographies. on the corner of grocery with health-and-beauty profile in a critical market. The format was de- Because the new format considerably cuts aids,” he said. “And it still has a drive-through.” back on general merchandise, it is described by Meijer is promoting free antibiotics and prena- Headquarters: Grand Rapids, Mich. the retailer as pharmacy- and grocery-focused. tal vitamins to help draw customers to its new 2009 sales: $15.1 billion So Meijer is, essentially, counting on the initia- stores. The retailer added free antibiotics in 2006 % change vs. 2008: 2.7% tives it has launched in those operations to sell and free prenatal vitamins in 2008. The program No. of stores: 190 the store to new customers. Of course, Meijer is widely popular with customers in Michigan, No. of stores with Rx: 190 has been among the most eager proponents of where the company is headquartered, and in the providing free antibiotics to establish itself as a rest of its market area, including , Ohio, In- Avg. store size: 205,000 sq. ft. family-oriented retailer. diana and Kentucky. “We’re over 5 million free an- Rx sales: $453 million The company’s first smaller-format store had a tibiotic prescriptions filled, and over half a million

M ei j er % of sales from Rx: 3% January launch in the Chicago suburb of Niles, Ill. prenatal vitamin scripts filled,” Guglielmi said. Sales per store: $79.5 million At 102,000 sq. ft., it comes in at about half the size Building on an initiative it launched in 2008, Source: Company reports of a typical Meijer supercenter. A second smaller- Meijer continues to expand Be Well, a program format Meijer is preparing to launch in Orland Continued on page 30

20 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Bridging the health, convenience gap By Jim Frederick Kerr Drug answers with a resounding “yes.” Kerr continues to push innovation as both a Can a retailer be both a fully stocked drug store neighborhood healthcare provider and a convenient and a professionally staffed community healthcare source of everyday necessities in such categories as resource? North Carolina regional drug powerhouse food, beauty, personal care, household items and, in a handful of stores, fresh baked goods and coffee. Headquarters: Raleigh, N.C. To that end, the company pursues a multipronged 2009 sales: $600 million* approach to drug store retailing. It offers both acces- % change vs. 2008: NA sible, affordable clinical-care services, and even pri- No. of stores: 90* vate patient examination rooms staffed by nurses and part-time physicians in a few locations, along No. of stores with Rx: 90* with full-service drug stores with big front ends. Avg. store size: 8,400 sq. ft. Late last year, Kerr opened its third Community Kerr Drug continues to push innovation as both a neighborhood health- care provider and a convenient source of everyday necessities. Rx sales: $390 million Healthcare Center at the original Kerr Drug store, % of sales from Rx: 65% opened by founder Banks Kerr at University Mall in screenings, immunizations and other community Sales per store: $6.5 million Chapel Hill, N.C., in 1950. The store has long served health services, alongside a fully stocked drug store.

K err Dr ug as a testing site for community health services and “Chapel Hill has always been our lab,” said direc- * Following the sale of Charleston, S.C., stores to CVS Caremark Source: Drug Store News products for the chain, and the newest “hybrid” ver- tor of marketing Diane Eliezer. The key reason: the sion of the store is a deft blend of clinical care, health Continued on page 29 Scrappily catering to ‘neighborly’ tradition With the sale of 14 Super D and three Ike’s stores market for prescriptions, health-and-beauty aids, in Memphis to Walgreens on March 23, 2010, scrap- general merchandise, giftware, photo, electronics Headquarters: Pine Bluff, Ark. US A Dr ug py regional retailer USA Drug has pared its store and convenience foods. It succeeds by hewing close- 2009 sales: $725 million count to 152 units and pulled out of one heavily ly with the shopping traditions and value demands % change vs. 2008: 3.6% contested market. The sale also marked “the end of of its customers, whose loyalty has been cultivated No. of stores: 169* the very large Ike’s format,” said USA Drug presi- through personalized care at the pharmacy, and help- No. of stores with Rx: 169* dent and CEO Joe Courtright. ful service and everyday low pricing at the front end. Avg. store size: 6,000 sq. ft. Nevertheless, Courtright said, “we fully expect Helping maintain profits are such high-margin to reinvest the proceeds from the sale toward more categories as giftware, which has been expanded, Rx sales: $435 million acquisitions and, as a result, forecast even greater and the Select private-label brand. “Select brand pro- % of sales from Rx: 60% earnings. ... We have several additional store proj- vides [more than] 750 items and has become one of Sales per store: $4.3 million ects planned for the current fiscal year.” the best-packaged brand-alternative product lines in * Includes 17 stores sold to Walgreens in March Source: Drug Store News For USA Drug, that upbeat assessment is true to the country,” the company asserted. form. The company remains a doughty competitor Behind the folksy, hometown approach also are Driving that capability is a point-of-sale system on Walmart’s home turf, staking a hefty claim to the high-tech forecasting and replenishment systems. jointly developed by IBM and USA Drug. Northeast chain praised for health initiatives By Alaric DeArment Owned by Belgian supermarket operator Del- haize Group, Scarborough, Maine-based Hannaford Health-and-wellness initiatives have become operates 173 stores throughout New England, of one of the latest rages among retailers, particularly which 120 have pharmacies. Those pharmacies supermarket pharmacies, and Hannaford Super- have achieved high rankings among consumers. markets has made it a point to lead the way. In June 2009, Hannaford announced that a sur- vey of consumers showed that its supermarket Headquarters: Scarborough, Maine pharmacies ranked highest among store chains in 2009 sales: $4.3 billion the Northeast, beating Stop & Shop, ShopRite and % change vs. 2008: 3% with a score of 90 out of 100. The survey No. of stores: 173 was based on responses from 40,133 consumers who bought prescription drugs in walk-in stores Hannaford last year announced that surveyed consumers ranked its No. of stores with Rx: 120 supermarket pharmacies highest among store chains in the Northeast. between April 2006 and April 2007, and focused on Avg. store size: 34,000 sq. ft. such aspects of pharmacy as service, knowledge, on Health named Hannaford a platinum-level or- Rx sales: $387 million speed and medicine availability. The article also ganization in the Best Employers for Healthy Life- % of sales from Rx: 9% praised Hannaford’s generic drug discount pro- style Awards, which NBGH presents annually to Sales per store: $24.9 million gram, which sells 30-day supplies of generics for $4. employers that it determines have shown effective H a nn af o r d Source: Drug Store News The chain’s health initiatives have received acco- efforts to improve the health of employees and lades as well. In July, the National Business Group their families.

21 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Health initiatives help consumers ‘ShopRite’ By Antoinette Alexander As part of its commitment to helping its custom- ers live healthier lives, on-site registered dieticians Health and wellness has been a significant focus are available at select locations for customer consul- for ShopRite and Wakefern Food Corp., the retailer- tations. According to ShopRite spokeswoman Karen owned cooperative whose members own and oper- Meleta, the program now includes 11 registered dieti- ate more than 200 ShopRite stores. cians who provide health and nutrition information. Through the free service, customers can discuss Headquarters: Keasbey, N.J. their health and dietary needs, and create custom- 2009 sales: $11.7 billion ized meal plans. The dietician also educates cus- % change vs. 2008: 9.4% tomers on a number of issues, including proper No. of stores: 223 nutrition for specific medical conditions. ShopRite’s corporate dietician has a presence on ShopRite. No. of stores with Rx: 183 On-site dieticians at select ShopRite stores provide customer consultations. com, as well as on , providing a forum for Avg. store size: 45,000 - 65,000 sq. ft. health-and-wellness information, healthy recipes conducts in-store flu and H1N1 clinics and, in select Rx sales: $585 million* and discussion of nutrition, Meleta noted. locations, additional vaccinations may be available. % of sales from Rx: 5%* In addition to nutritional counseling services, the On the heels of ShopRite’s expansion into Mary- Sh o p R ite Sales per store: $52.5 million pharmacies conduct monthly screenings for such spe- land in 2009, Wakefern recently added nine new * Drug Store News estimate Source: Company reports, Drug Store News cific health issues as glucose, cholesterol, blood pres- Connecticut locations, nearly doubling its presence sure and bone density. During flu season, ShopRite in the state and adding two new members. Rx rewards program saves more loyalty By Barbara White-Sax program, which offers patients a 30-day supply of more than 350 medications for $4. The program be- Headquarters: Novi, Mich. Novi, Mich. — Despite a drop in store count, Sav- gan in 2008 to match big-box retailers’ prices and 2009 sales: $365 million* Sa Mor franchise pharmacies focused on providing keep customers loyal to Sav-Mor pharmacies. % change vs. 2008: -9%* superior patient care and looked to the company’s Richard Grossman, Sav-Mor’s president, said No. of stores: 76 v-Mo r corporate headquarters for the tools needed to that at the time the program was instituted, it No. of stores with Rx: 76 face current market challenges. was a difficult decision, but the chain decided Avg. store size: 8,000 sq. ft. Relationships with drug manufacturers, phar- to fight the competition on more than price. “We macy benefit management companies and indus- put a value on working with our pharmacists to Rx sales: $277.2 million try organizations are built at the corporate level, help manage prescription costs,” Grossman told % of sales from Rx: 83% and Sav-Mor continued to focus efforts on winning Drug Store News. Sales per store: $4.8 million new partners. Last year, the company also rolled Through its Advertising Circular Campaign, * Reflects loss of seven franchise stores Source: Drug Store News out a new software system designed to handle Sav-Mor pharmacies produce 14 direct-mail tab requirements for flexible spending accounts. and coupon books a year. While each store con- vertising and promotions program that would be The company continued its Prescription Rewards trols local delivery, each is able to tap into an ad- out of reach to an independent pharmacy. Pharmacy ops up chain’s health cred out West By Mike Duff stores on Jan. 12. The company has built an extensive flu vaccina- Raley’s responded to heightened awareness of tion program over 15 years that includes programs flu in its California and Nevada markets by mov- that encourage employee vaccinations and ensure ing up its seasonal vaccination program to Sept. 16 all its customers have access to flu shots. “In 2009, this year, and launching an H1N1 effort at select we hosted seasonal flu shot clinics inside the ma- jority of our stores — even those without pharma- Headquarters: West Sacramento, Calif. cy departments — by working with Health Tech 2009 sales: $3.54 billion Mobile and Renown Health Group,” said Amy % change vs. 2008: 1% Davis, a company spokeswoman. “Demonstrat- No. of stores: 134 ing our company’s commitment to helping em- No. of stores with Rx: 109 ployees maintain healthy lifestyles, Raley’s once again offered free seasonal flu vaccinations to Avg. store size: 50,000 sq. ft. every employee who chose to get one.” Rx sales: $318 million Raley’s has developed a range of pharmacy Raley’s has developed a range of pharmacy operations to bolster its % of sales from Rx: 9% operations designed to bolster its credentials as a R aley ’s credentials as a healthy-living resource. Sales per store: $26.4 million healthy-living resource in the community. It pro- Source: Company reports motes natural and organic foods, as well as nu- etician Earline Griffith. It also has offered health tritious eating with advice from its registered di- screenings as part of store openings.

22 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT With ‘Thrifty’ approach, co. invests in tech, Rx

By Barbara White-Sax business, opened three new locations in 2009, and plans to open six or seven new stores in 2010. Thrifty White cautiously opened new stores In addition to opening new stores, the company despite a sluggish economy. The chain, which invested in improving technology at its central fill depends heavily on the pharmacy portion of its site — a move that gave pharmacy operations a boost. “We have upgraded our central fill site for Headquarters: Maple Grove, Minn. maintenance prescriptions to complete robotics and conveyors, creating efficiencies with a positive 2009 sales: $318.6 million return on investment that began payback in the % change vs. 2008: 3.7% first month,” said Gary Boehler, EVP pharmacy. Thrifty White improved technology at its central fill site and expanded its pharmacy programs last year. No. of stores: 89 Thrifty White continued to expand its pharma- No. of stores with Rx: 89 cy programs and has increased its long-term care area of focus at the chain, and Thrifty White prides Avg. store size: 4,600 sq. ft. business to more than 16,000 beds, with additional itself on its ability to provide top-tier patient care. Rx sales: $291.3 million growth in that segment expected for 2010. This “MTM in our pharmacies, especially in conjunc- past year was the chain’s biggest year for the ad- tion with Mirixa Corp., continues to expand,” % of sales from Rx: 91% ministration of flu shots. “Our stores gave [more Boehler said. “In 2009, we completed 100% of the Sales per store: $3.62 million than] 30,000 flu shots in 2009, and that continues nearly 700 cases presented to our stores for pa- Source: Company reports

T hrifty W hite to grow each year,” Boehler said. tient follow-up.” Medication therapy management also is a key Continued on page 30 Ohio sports, Rx team up to win customers By Michael Johnsen Wellness” care package, which included a hand sani- Headquarters: Medina, Ohio tizer, antihistamine and other products to ward off 2009 sales: $530.5 million* Dr ug M art Cleveland’s hometown drug store this past fall winter colds, with each prescription to its loyalty card- Di s c oun t signed a major deal with Cleveland’s best shot at holders, already 1 million strong. “That was a very % change vs. 2008: 1.9% becoming a title town. Fifty-eight of Discount Drug successful program,” Tom McConnell, CFO and SVP No. of stores: 69 Mart’s 69 Ohio locations have become exclusive, finance, told Drug Store News. “We’re going to con- No. of stores with Rx: 69 full-service retail outlets to sell tickets to all Quicken tinue [that wellness theme] with a summer wellness Avg. store size: 25,000 sq. ft. Loans Arena events, including courtside seats for program,” he added. Frequent use of the loyalty card Rx sales: $234.2 million the NBA’s Cleveland Cavaliers, and tickets to the also ties into the Quicken Loans Arena marketing deal AHL’s Lake Erie Monsters, Arena Football League’s — customers can earn points with each purchase that % of sales from Rx: 44.1% Cleveland Gladiators, concerts and other events. can be redeemed for Cleveland Cavaliers jerseys or Sales per store: $7.7 million * Sales exclude former mail-order Source: Drug Store News As part of the deal, Discount Drug’s brand will other merchandise. business, sold in 2009. be featured on all Cavaliers/Monsters/Gladiators Other significant events for Discount Drug in the communications, and the pharmacy will be the past year include the addition of wigs to its already tail from $150 to $1,000. Many insurers provide their sponsor of a half-time giveaway for fans. extensive lineup of durable medical equipment. The patients with an allowance toward the purchase of a This past fall, Discount Drug introduced a “Winter wigs are designed for oncology patients and can re- wig, McConnell said. Fostering health with immunizations, MTM By Antoinette Alexander management and immunizations. “We want to take advantage of all of the MTM Save Mart, which operates 115 pharmacies within programs that are available. ... We want to make sure its 244 stores, continues to bolster its pharmacy op- that our pharmacists are participating in MTM,” erations as it sets its sight on medication therapy said Michele Snider, senior director of pharmacy. Furthermore, in May, the company will kick off Headquarters: Modesto, Calif. MTM for its own employees. Its pharmacy depart- 2009 sales: $4.8 billion ment will be providing MTM to employees who % change vs. 2008: -5.9% use Save Mart pharmacies. To further promote the No. of stores: 244 health and wellness of its associates, the company has implemented several internal initiatives, such as Save Mart is encouraging pharmacists to be trained in giving immunizations. No. of stores with Rx: 115 a healthy eating plan for meetings, discounts at fit- Avg. store size: 60,000 sq. ft. ness clubs and gyms, and associates are encouraged the current focus is on seasonal flu and pneumonia, Rx sales: $235.5 million to participate in charity walks. it eventually may expand into other immunizations, v e M art % of sales from Rx: 4.9% In addition, the company is encouraging its phar- such as hepatitis. Sales per store: $19.7 million macists to be trained in providing immunizations. Snider noted that the company continues to part- Sa Source: Company reports By this flu season, about 75% of the company’s phar- ner with Kellogg’s for the “Ask the Pharmacist” radio macists will be trained to give immunizations. While Continued on page 30

23 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Supermarket shows Rx southern hospitality

By Mike Duff which also included informational health-and-well- La., offering an expanded pharmacy relocated to the ness expos, the chain added a free anti­biotic and front of the store. The new configuration provided The 151-unit Brookshire Grocery chain added and discount generic drug program last year. for a wider selection of health-and-beauty products, upgraded pharmacy operations at stores through- “Our generic program includes more than 400 and established sections devoted to diabetes, sleep out its market area in 2009. Among its initiatives, drugs,” company spokesman Sam Lanier noted. and therapeutic aids and supplies. It also added “We have 30-, 60- and 90-day supplies — based on drop-off and checkout areas to pharmacy; addition- Headquarters: Tyler, Texas usual day’s supply — for $3.99, $6.99 and $9.99, re- al office space for health services and consultations; spectively. There are about 50 entries on our Free An- and durable medical equipment, a category not of- 2009 sales: $2.12 billion tibiotics Program, which includes varying strengths ten offered in supermarket pharmacies. % change vs. 2008: -3.6% of about a dozen or so antibiotics.” In January 2009, the company renovated a

hire No. of stores: 151 In early October 2009, Brookshire opened up a 38,500-sq.-ft. store in Shreveport, expanding the

s No. of stores with Rx: 112 brand new, 31,000-sq.-ft. store in Seagoville, Texas, pharmacy operation and adding a drive-through. cery k Avg. store size: 40,000 sq. ft. that provided enough space for a pharmacy op- Brookshire’s commitment to expanding phar- o Rx sales: $296.8 million eration. A few weeks later, Brookshire celebrated macy was evident in the launch of a new concept oo a grand reopening of its store in Forney, Texas. store — Fresh by Brookshire’s, a 55,000-sq.-ft. super- Gr r % of sales from Rx: 14.0% Beyond an additional 2,200 sq. ft., the store also market, opened in south Tyler, Texas, on Feb. 16. The B Sales per store: $14 million gained an upgraded pharmacy drive-through. new format was developed for shoppers with a taste Source: Company reports In June 2009, Brookshire debuted a newly remod- for gourmet food, but also houses an expansive se- eled 62,000-sq.-ft. Super 1 Foods store in Lafayette, lection of wellness items and a full-line pharmacy. Taking ‘Healthy Bites’ out of the economy

By Michael Johnsen W ei s M arket Headquarters: Sunbury, Pa. The state of the economy may be top of mind 2009 sales: $2.5 billion among all shoppers, though you wouldn’t be able % change vs. 2008: 3.9% to tell at Weis Markets. For fiscal 2009, ended Dec. No. of stores: 164 26, 2009, Weis Markets posted sales gains of 3.9% to No. of stores with Rx: 128 $2.5 billion on the strength of comparable-store sales Avg. store size: 48,000 sq. ft. increases of 1.8%. “We continue to make progress in a difficult market environment, marked by cautious Rx sales: $226 million customer spending and price deflation in key catego- % of sales from Rx: 9% ries,” stated David Hepfinger, Weis Markets’ presi- Sales per store: $15.3 million Weis Markets’ remodeled flagship store features an upgraded decor and dent and CEO. “Despite these challenges, we have Source: Company reports layout, and redesigned pharmacy and health-and-beauty care departments. produced five consecutive quarters of strong oper- ating results through improved operating perfor- prices for a fixed amount of time, enticing customers is called, ended April 1 and included a total of 3,224 mance, more focused promotional programs and in- to value shop at Weis, knowing that the prices will SKUs. “It is clear our customers remain in a cautious creased efficiencies at store and distribution levels.” be the same for at least the next three months. Weis mood due to the weak economy,” Hepfinger said. A big push in the past year has been lowering Markets’ most recent Price Freeze, as the program Continued on page 29 Franchise model expands its brand of Care The past year has been a case of addition through Care Pharmacies represents a franchise model subtraction, noted Gerry Crocker, CEO of Care to the extent that each pharmacy is independently Pharmacies. “We’re doing more [volume] with owned and operated, but together the franchisees less,” Crocker shared with Drug Store News. possess a 100% stake in the company. “We’re at- tracting higher-volume independent operators Headquarters: Alexandria, Va. because of our model,” he added. That’s how a 2009 sales: $279.5 million franchisee like Care increased sales volumes by % change vs. 2008: 30% 30%, despite three fewer members than last year. No. of stores: 52 In the past year, Care extended its brand well No. of stores with Rx: 52 beyond the D.C. metropolitan area and Vermont into Pennsylvania, New Jersey and New York, and Avg. store size: 3,500 sq. ft. Care’s franchisees, such as Metropolitan Pharmacy in NYC, are independently plans to continue looking across the nation for vi- owned and operated, and together possess a 100% stake in the company. C are Rx sales: $265.5 million able franchise members. “We have very mature % of sales from Rx: 95% discussions going on in California, for instance. macies has extended a nonvoting affiliate member- Sales per store: $5.4 million [And] New York seems to be a very fertile area for ship to those independents who don’t necessarily Source: Company reports us,” Crocker said. want to fly the Care banner but need to take advan- In addition to its franchise agreements, Care Phar- tage of the collective buying power Care affords.

24 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Baby-stepping to well-care with free vitamins

By Mike Duff could,” Simon said. “This is an extension of our free antibiotic and $4- and $10-prescription program.” The time was right for Schnucks to expand on The retailer launched its prenatal drug initia- its free antibiotics program and to add prenatal tive in January and, in announcing the effort, VP vitamins, said company spokesman Paul Simon. pharmacy Michael Juergensmeyer said Schnucks “We felt it was our responsibility to help when we wanted to respond to a reality of the recession. “Due to economic considerations, many patients Headquarters: St. Louis don’t refill prescriptions for chronic conditions, let 2009 sales: $2.5 billion alone take prescription prenatal vitamins for well- % change vs. 2008: 1% ness care,” he stated. No. of stores: 106 On Jan. 18, the 103 Schnucks that operate phar- macies began providing 13 of the most-often-pre- No. of stores with Rx: 103* Schnucks’ Culinaria concept store in St. Louis has gourmet food and scribed prenatal vitamins free for customers hold- a pharmacy. Avg. store size: 58,000 - 63,000 sq. ft. ing scripts. The prenatal vitamin effort fell under Rx sales: $206 million Schnucks’ Health and Wellness Program, which than $16 million since its inception. % of sales from Rx: 8.2% provides free generic oral antibiotics and a range Schnucks pharmacies addressed a range of Sales per store: $23.6 million of generic prescription drugs at a price of $4 for concerns in their community outreach efforts Sch nu ck s a 30-day supply and $10 for a 90-day supply. The this past year. In fall 2009, the retailer operated a * Includes one stand-alone pharmacy Source: Company reports, Drug Store News company estimated that the pharmacy discount program in select pharmacies across its program has saved Schnucks customers more Continued on page 30 Wash. family chain takes stand against state

By Antoinette Alexander In September 2009, the industry pricing standard B artell Dr ugs was reduced as a result of a court decision in Mas- Headquarters: Seattle Bartell Drugs, the nation’s oldest family-owned sachusetts. Unlike most other insurance providers, 2009 sales: $353.4 million drug store chain, continues to plug along on a including other states, the Washington State Depart- % change vs. 2008: 0% growth path as it takes a stand against its home ment of Social and Health Services made no effort to No. of stores: 57 state’s move to reduce compensation to pharmacies. offset the reduction, resulting in sizeable reductions No. of stores with Rx: 57 The Seattle-based regional player announced in in payments to pharmacies, stated George Bartell, Avg. store size: 15,000 sq. ft. September 2009 the opening of its 57th store in Is- chairman and CEO of Bartell. saquah, Wash. The 16,395-sq.-ft. store marked the “We hope that the state will reconsider their reim- Rx sales: $187.3 million third Bartells store to open in 2009, following the bursement and meet its responsibility to provide ac- % of sales from Rx: 53% openings of stores in Lynnwood and Mill Creek, cess to all recipients,” Bartell stated. “Our Sales per store: $6.2 million Wash., in July and August, respectively. sincere hope is that this issue will be resolved so we Source: Drug Store News However, 2010 kicked off with a bit of a snag as do not need to expand our exclusion of DSHS pre- the company announced it would stop filling Med- scription services to additional locations.” to provide music and messaging services to the com- icaid prescriptions at 15 of its stores as of Feb. 1. In other news, Bartell partnered with PlayNetwork pany’s newest stores, with additional stores to follow. Firm Rx roots help big-box make its ‘Marc’ By Barbara White-Sax Marc Glassman has not only has managed to hang Marc’s isn’t just about price, and the chain aims on, but also continues to grow. to offer its customers “outstanding services, ef- Twenty years ago, big-box drug chains selling ev- The large-format stores known for their sharp pric- ficient operations and innovative business solu- erything but the kitchen sink were a popular format. ing and deal purchases continue to carry a variety of tions.” In the pharmacy department, Marc’s auto- Most of those chains are gone, but Cleveland-based merchandise from liquidations, overstocks, closeouts mated prescription line allows consumers to not and buybacks, and customers seem to love the fact only connect with a pharmacy associate, but also Headquarters: Cleveland that they never know what they might find when determine what time their prescriptions will be 2009 sales: $1.0 billion they shop the chain. ready to pick up. % change vs. 2008: 8% Marc’s operates 65 stores — 60 Marc’s locations in The chain has continued to expand its grocery No. of stores: 65 northeast Ohio and five Xpect Deep Discount Drug departments. It partners with key growers and No. of stores with Rx: 52 Stores in Connecticut. Opportunistic buying makes employs a strategy of high product volume and the chain strong in general and seasonal merchan- multiple inventory turns. Daily product manage- Avg. store size: 50,000 sq. ft. dise, but the chain still is firmly rooted in pharmacy. ment enables Marc’s to bring consumers a full line

M arc Rx sales: $150 million Discount positioning is evident in the pharmacy of fresh seasonal and everyday fruits. Marc’s also % of sales from Rx: 15% department as well, where the chain promotes gener- offers a gourmet cheese section at many of its loca- Gla ss ma n Sales per store: $15.4 million ic drugs. For several years, Marc’s has offered $3.99 tions, and has added meat at nearly 50 stores. The Source: Drug Store News for a 30-day supply and $9.99 for a 90-day supply chain also has begun to tell customers about its deals on more than 400 generic drugs. best food deals on Twitter.

25 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Communication key in chain’s Rx initiatives By Mike Duff that the Salado opening gives the chain a total of 67 operating pharmacies among 71 stores operat- introduced its newest su- ing under the banner. permarket with a pharmacy department to the Pharmacy director Ted Zieschang said making town of Salado, Texas, in December 2009. Emily headway had been tough in 2009, with the reces- Watts, a Brookshire Brothers spokeswoman, noted sion impacting Brookshire Brothers’ business. He said the company’s pharmacy operations had to Headquarters: Lufkin, Texas deal with tighter budgets “just like everyone else.” 2009 sales: $1.17 billion The retailer is finding new ways to communicate % change vs. 2008: -2.6% with consumers about its pharmacy and pharma- cy operations. Among the efforts that Brookshire No. of stores: 71* Brookshire Bros.’ newest store in Salado, Texas, gave the chain a total of Brothers pursued last year was a social media ini- 67 operating pharmacies among 71 stores operating under the banner. No. of stores with Rx: 67 tiative. Active on both Twitter and Facebook, the

ther s Avg. store size: 32,500 sq. ft. company has used social media to alert consum- Brookshire Brothers is using the pharmacy sec- Rx sales: $91.3 million ers to such pharmacy programs as the availability tion of its Web site to promote its Script Saver, % of sales from Rx: 7.8% of H1N1 flu shots. In particular, on Dec. 28, 2009, which promises lower prices on a wide assort- B r o Brookshire Brothers used its Facebook page to let ment of commonly prescribed drugs. Free sign-

B r oo k s hire Sales per store: $16.5 million customers know that inoculations would be avail- up entitles consumers to participate in Brookshire * Excludes 31 c-stores Source: Company reports able the next day and to connect them to the phar- Brothers’ $4 for 30-day and $10 for 90-day generic macy finder on its Web site. prescription drug programs. Family pharmacy makes new name for itself By Antoinette Alexander Messick has held various positions at Fruth, in- cluding comptroller, CFO and COO, prior to be- Headquarters: Point Pleasant, W.Va. Regional player Fruth Pharmacy has under- ing named president. 2009 sales: $134 million gone a good deal of change in the past year as One of the biggest initiatives currently un-

% change vs. 2008: 0% F r u th it has a new president in place, a new robust der way at the company is the launch of a new marketing program in the works and a loyalty 12-month marketing program. “We hired a mar- No. of stores: 25 program on the horizon. keting firm out of Pittsburgh to develop some No. of stores with Rx: 25 Bob Messick may not be new to Fruth, hav- professional-looking TV commercials. ... We Avg. store size: 10,000 sq. ft. ing joined the company in 1986, but he is fairly have done some TV in the past, but we have Rx sales: $111 million new to the role of president. Messick, who also always left it to the local TV stations to do the % of sales from Rx: 83% serves as COO, assumed the role on an interim filming,” said Messick, who noted that the cam- Sales per store: $5.35 million basis in June 2009 — succeeding Laddie Bur- paign also includes radio and circulars. dette, who left the company — and on a perma- Through the campaign, Fruth Pharmacy will be Source: Company reports nent basis around August 2009. Over the years, Continued on page 30 Pediatric Rx window plays to chain’s market Navarro Discount Pharmacies, a regional player Marcio Cabrera, a managing director of MBF Health- with 28 stores that cater to the Hispanic market, is care Partners who was serving as the company’s stepping up its game as new CEO Steve Kaczynski interim CEO. Kaczynski previously served as presi- settles into his role at the chain. dent and CEO of Biggs, a division of Supervalu, and In late 2009, Kaczynski took the helm, succeeding has held executive positions at , Stores and Cub Food.

t Headquarters: Miami In another executive move, Cristy Leon-Rivero, 2009 sales: $320 million* former director of human resources, was promoted

s % change vs. 2008: 1.2% to VP marketing. In her new role, Rivero will oversee oun

c No. of stores: 28** advertising, public relations, community relations Navarro, which caters to the Hispanic market, has designed customer s and marketing. No. of stores with Rx: 27* profiles to better serve its shoppers. In an effort to better serve its shoppers, the com-

Di Avg. store size: 16,924 sq. ft. pany has designed customer profiles. For example, are often pressed for time and would like to get the o Rx sales: $112 million “Carmen” is a working mother, average age of medications for their little ones as soon as possible. % of sales from Rx: 35% 38.7 years, who mainly speaks Spanish but under- The window is identified with specific signage, harmacie arr

P Sales per store: $11.3 million stands English. She has a dual household income and provides expedited service and attention by a v * Based on 28 pharmacy store locations of less than $44,000. To help the Carmen customer, dedicated Navarro representative who takes the pre- ** Includes one small non-Rx location at Miami National Airport Navarro recently opened a pediatric prescription scription, consults with the pharmacist and ensures Na Source: Company reports window to help expedite service for parents who that it is promptly dispensed.

26 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT Midwest chain a ‘First Stop’ for cash-strapped By Antoinette Alexander When customers sign up for the card, they receive a $10 coupon to be used anywhere in the store. Headquarters: Sioux Falls, S.D. L ewi s Dr ug Lewis Drug, which was established in 1942 as There’s a one-time $10 sign up fee to join. 2009 sales: $149 million the first self-service drug store in South Dakota “It is very successful,” Mark Griffin, Lewis Drug and the surrounding region, continues to see suc- president and CEO, said of the card program. “We % change vs. 2008: 2% cess with its loyalty program, and is gearing up for wanted something that sets us apart and makes us No. of stores: 32* the opening of new stores. different from everyone else.” No. of stores with Rx: 32* The company, which operates 32 stores in South Meanwhile, Lewis Drug is expecting to open two Dakota, Iowa and Minnesota, continues to promote additional locations this year, including a store in Avg. store size: 45,000 sq. ft.** its First Stop Pharmacy Club hybrid card program. Sioux Falls on a 6-acre complex that will be adjacent Rx sales: $74.5 million Looking to appeal to cash-strapped shoppers, it is to a medical clinic. The ground is expected to be % of sales from Rx: 50% marketed as: “Prescriptions for less than $1 a week.” broken for the complex this spring. The card program, which launched in late 2008, The new store that will be adjacent to a medical Sales per store: $10.2 million** offers cardholders a 30-day supply of more than clinic certainly isn’t the first of its kind for Lewis * Includes Lewis Drug/Lewis Family Drug stores ** Lewis Drug format 400 generic drugs and select antibiotics for $4, and a Drug. Griffin said there are about four similar loca- Source: Company reports, Drug Store News 28-day supply of select oral contraceptives for $12. tions throughout Sioux Falls. Integrative pharmacy builds from ground up By Michael Johnsen That practice — where Pharmaca converted tra- Headquarters: Boulder, Colo.

ditional community pharmacy footprints into its in- In te g rati v e Fresh off of a 35.1% boost in overall sales, Phar- tegrative pharmacy model — relied on preventing 2009 sales: $82 million P harmaca maca Integrative Pharmacy will be looking to ex- a pre-existing patient base from switching pharma- % change vs. 2008: 35.1% tend its reach within the five markets it currently cies. Now the chain has an established brand name No. of stores: 22 operates in — Colorado, California, New , in the markets it serves, based in large part on that No. of stores with Rx: 22 Oregon and Washington — Mark Panzer, Pharmaca integrative pharmacy model that also drives the Avg. store size: 4,200 sq. ft. Drug Store News president, told . patient-pharmacist/healthcare professional inter- Rx sales: $48 million The plan, pending favorable market conditions, action for which Pharmaca has become known. In is to grow the business organically by some six to addition to pharmacists, Pharmaca staff members % of sales from Rx: 59% nine stores in the coming year, and possibly four include naturopathic and homeopathic physicians, Sales per store: $3.7 million to eight in the year beyond that. And no longer is nutritionists, herbalists and aestheticians. Source: Company reports Pharmaca growing exclusively through the acqui- Indeed, the last 10 stores have been built from the sition of community pharmacies, a practice that ground up, Panzer said, and many in high-traffic beholden to a specific location as it may have been helped establish the pharmacy concept early on. strip centers, suggesting that Pharmaca is no longer through its acquisition model. Putting the ‘OTC’ in the ‘dotcom’ business For Drugstore.com, the over-the-counter seg- hold and other products — plus the roughly 10,000 ment is a significant chunk of its business. And it products through deals with drop-ship vendors — is only getting stronger as the company folds in accounted for 74% of its net sales. This is up from acquired SkinStore.com operator Salu, and further 71% of sales in 2008. leverages technology to better serve shoppers. It is likely that its OTC business, which experienced Drugstore.com, whose business is comprised net sales growth of 32% during the fourth quarter, of OTC, vision and mail-order pharmacy, stated will remain robust and benefit from the February ac- that for 2009, its stockpile of roughly 35,000 non- quisition of Salu, owner and operator of SkinStore. prescription health, beauty, personal care, house- com. Salu operates in Sacramento, Calif., and is now a subsidiary of Drugstore.com. With the acquisition, the company now is one of the largest online beauty m Headquarters: Bellevue, Wash. o retailers, offering mass beauty products on Drug-

c store.com, prestige beauty brands on Beauty.com . 2009 sales: $412.8 million and clinical skin care products on SkinStore.com. Drugstore.com stated that its approximately 35,000 OTC products % change vs. 2008: 12.6% accounted for 74% of its net sales. re Furthermore, the company announced in Febru- o No. of active customers: 3 million ary the launch of AtHisBest.com, a first-of-its-kind That’s not to say that the company’s mail-order t Mail-order pharmacy: $37.3 million site dedicated to men’s health and grooming essen- pharmacy business is not important. The segment, % of sales from mail-order Rx: 9% tials. The site offers more than 10,000 items, includ- which accounted for 9% of net sales in 2009, of- ugs ing both mass and prestige products. fers more than 5,500 prescription drugs, including Source: Company reports New for Beauty.com, as of earlier this year, is a many specialty drugs for the treatment of such Dr fully transactional iPhone app for mobile commerce. Continued on page 30

27 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT

ing an open, less cluttered structuring its healthcare di- Walgreens “We are integrating Walgreens’ 70,000 front end, softer colors, low- visions to support its integrat- Continued from page 3 ered fixtures and improved ed “Pharmacy, Health and and what they want.” If suc- healthcare providers, on the front lines sight lines, new signage and Wellness Solutions” offering cessful, he added, CCR will easier-to-find categories and to employers, managed care unleash “a virtuous cycle” of health care across the organization, products. Walgreens began organizations, pharmacy ben- by creating “a better experi- rolling the new design into efit managers and govern- ence” for customers, which with a unified sales team offering these its Texas stores in March. ment clients. in turn will lead to higher The CCR initiative con- “In the past several years, sales, faster turns, lower in- services to payers as a single, seamless tinues to progress, the com- we’ve developed a broad set ventories and lower costs. pany reported, and is now of quality, affordable and ac- “That equals increased cash integrated solution.” featured in some 700 of the cessible pharmacy, health and flow and profit ... as long as company’s 7,180 drug stores. wellness services unmatched we’re in that virtuous cycle Greg Wasson, The company said it remains in our industry,” Wasson of business,” Miquelon said. Walgreens on track to have the new for- said. “We are integrating There’s still plenty of room mat in 2,500 to 3,000 stores by Walgreens’ 70,000 healthcare for improvement, Walgreens’ shopping experience” could we occupy ... getting more the end of fall 2010. providers, on the front lines CFO added. In 2009, he not- significantly boost that aver- items in the basket is the best Wasson also reported prog- of health care across the orga- ed, the average Walgreens age and add billions of dol- thing we can do,” Miquelon ress on other fronts as Wal- nization, with a unified sales shopper bought just 1.3 items lars to the top line, he said. recently said. greens continues its massive team offering these services at the front end. Creating “a “Clearly, with the more than CCR also has triggered a overhaul. Early last month, to payers as a single, seam- better and more relevant 7,100 phenomenal corners broader store redesign, yield- the company completed re- less integrated solution.”

although that assertion isn’t store’s division increased to receive exclusive offers di- Walmart readily apparent on the top 5.2% last year to $19.5 billion, Target rectly on their mobile phones. Continued from page 6 line. Sales last year increased and despite the 2% decline Continued from page 12 Coupons are redeemed by remodeling and less for new 1.1% to $258 billion, and dur- in fourth-quarter same-store healthy,” the company noted. scanning a barcode on the store construction. The com- ing the fourth quarter, same- sales, operating profit during “We view our participa- phone at checkout. pany estimated it will spend store sales actually declined the period increased 5.4% to tion in the alliance as part of Using their cell phones, between $7 billion and $8 bil- 2%. While the weak top line $5.6 billion. our civic responsibility,” as- customers also can access lion this year to add 11 million performance has analysts Even so, the company’s serted Target VP human re- their Target Mobile GiftCards, sq. ft. of domestic selling concerned, most are willing to 2009 performance was a step sources John Mulligan. “Its view online assortments, space; just two years ago it look past sales because profits backward from 2008 when vision on health ties closely check product availability spent $5.8 billion to add 23 are growing at an acceptable Walmart benefitted from the to ours, focusing on promot- and store locations, manage million sq. ft. At the end of rate. Also, with fewer resourc- fear and uncertainty that ing prevention and wellness, their Target gift registry and last year, more than 30% of es allocated for new store gripped the nation and sent and improving the nation’s lists, browse the weekly ad, the company’s stores were construction, financial returns droves of new shoppers to overall health.” and receive text and e-mail in the Project Impact format, have improved, and there is its stores while existing cus- Target’s leaders also con- notifications of deals. and by the end of 2011, more more cash available to return tomers became more loyal. In tinue to drive innovation as a On the expansion front, Tar- than 70% of the chain will to shareholders in the form of 2008, same-store sales at U.S. core response to a down econ- get opened its first stores in have undergone the extensive share repurchases and divi- stores increased 3.2%, and omy and intense price compe- Alaska and Hawaii over the Project Impact conversion. dend payments. The annual total sales increased 6.8% to tition. The newest example is past two fiscal years. The up- Walmart contended the dividend was increased re- $255.7 billion, while operat- the launch in March of a scan- scale discounter now can call remodeling program deliv- cently to $1.21 from $1.09. ing income increased 7.1% to nable mobile coupon pro- itself a truly national retailer, ers superior financial returns, Operating profit at the $18.6 billion. gram that allows customers with operations in 49 states.

cant focus, as the company Pharmacy continues to be an impor- A&P operates about 250 retail Kroger “ Continued from page 19 pharmacies and has more Continued from page 9 “We will be making further than 1,000 licensed phar- have proven successful in tant part of Kroger’s convenient, one- modifications during the macists. During the 2009 competing against all formats, fourth quarter, as we want cold-and-flu season, A&P including supercenters.” stop shopping strategy, and we are to shift some of our spend- kicked off an aggressive flu Kroger also operates a ing away from promotions vaccine program in part- Marketplace format through focusing on improving our customers’ entirely and into better ev- nership with ESI Medical four of its supermarket di- eryday shelf prices, as well that enabled shoppers to visions around the United pharmacy experience.” as better focus our adver- obtain free and discount- States: Kroger, Smith’s, Dil- tising on the really excel- ed seasonal and H1N1 flu lons and Fry’s. Marketplace Kroger report lent values we offer to con- vaccinations. In addition, stores “are generally smaller sumers on a regular basis,” A&P is promoting its re- than our [] mul- offer full-service grocery and “We expect to invest approxi- Haub told analysts during cently debuted mail-order tidepartment stores,” the pharmacy departments, as mately $1.9 billion to $2.1 bil- a Jan. 12 earnings call. pharmacy for the delivery company noted, and they do well as an expanded general lion in capital projects, with a Meanwhile, pharmacy of chronic and/or mainte- not include apparel. Howev- merchandise area.” strong bias toward remodels continues to be a signifi- nance medications. er, Kroger reported, “they do This year, Schlotman said, and infrastructure projects.”

28 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT

the past five years the key per- of Florida, where 37 of the new relocated clubs were added Publix formance indicator was nega- units were built and 729 of the Sam’s Club last year, but the closure of 10 Continued from page 16 tive. Despite a lack of topline company’s stores are located. Continued from page 16 units late in the fiscal year re- national reputation as a pre- growth, Publix managed to The company’s second-largest ture of the merchandising sulted in modest square foot- mier operator. However, 2009 grow profits 6.6% to $1.16 bil- market is Georgia with 177 group. “As we aggressively age growth. However, rough- was a challenging year for the lion, close to the record level stores, but expansion has con- drive these strategies, we will ly 50 clubs were remodeled company as its sales results achieved in 2007. tinued in contiguous states. be particularly focused on last year, and this year plans were impacted by food de- The company also achieved Publix currently has 42 stores in driving differentiated qual- call for 10 or fewer new or re- flation, a weak economy and a milestone last year by sur- South Carolina, 39 in Alabama ity, service and club experi- located clubs but as many as cannibalization from aggres- passing 1,000 stores as it and 27 in . Look- ence in fresh, health-and- 70 to 90 remodels. sive expansion in prior years. opened or relocated 48 stores ing forward, the pace of new wellness, technology and As if those changes weren’t Total sales increased 1.6% to end the year with a total store expansion is expected to seasonal categories.” enough, Sam’s moved into a to $24.3 billion, due largely of 1,014 units, compared with moderate further as plans call In keeping with the strat- new headquarters building, to the addition of new stores, 993 the prior year. for just 34 new stores, includ- egy to increase productiv- outsourced the in-club prod- as same-store sales declined The company continued to ing the addition of six former ity, Sam’s Club this year will uct demonstration business, 3.2%, marking the first time in invest heavily in its home state Albertsons locations. accelerate its focus on club launched a loyalty market- remodeling projects while ing program called eValues services. Among those dis- Web site, where shutterbugs overall unit growth slows to a and adopted the new tag H-E-B counts: access to any of 500 ge- can order prints and enlarge- standstill. Roughly 15 new or line, “Savings made simple.” Continued from page 18 neric drugs for $5; 500 brand- ments, build photo books, cre- To generate customer traf- ed medications for $50 or less; ate customized cards and cal- We will be particularly focused on driv- fic at its prescription counters, a 90-day supply of generic endars and even create t-shirts “ the chain wields a powerful medications for $9.99; no-cost printed with their own photos. ing differentiated quality, service and club competitive weapon: its two- health screenings at H-E-B The chain even does direct tiered Rx Rewards loyalty pharmacies; and discounts on marketing to kids through experience in fresh, health-and-wellness, card. For a nominal enroll- selected pet medications. its “H-E-Buddy” campaign, ment fee, customers 18 years One growth opportunity H- which features private-label technology and seasonal categories. and older can upgrade to the E-B has fully capitalized on is snacks, a cartoon character, ” premium Platinum card pro- digital photography. The chain games and other fun activi- gram, which qualifies them offers a fully interactive digital ties to educate kids about Linda Heffner, for additional discounts and photofinishing service on its healthier foods and snacks. Sam’s Club

pharmacy and the delivery Kerr launched a new, mul- ers in Kerr’s home market Kerr Drug of clinical care,” Civello said. tifaceted loyalty program area can receive exclusive Weis Continued from page 21 “We will continue to focus on March 1. Called Kerr Re- weekly discounts by scan- Continued from page 24 store’s close proximity to the those strengths.” wards, the new program ning their phone at point of “Over the past year, our Price UNC school of pharmacy and Among more recent front- gives customers five differ- sale. “Accessibility to product Freeze program has generat- its students and faculty. end initiatives: the launch ent ways to shop the chain information, services and dis- ed $16 million in savings for With the sale last May of in 2009 of Naturally Kerr, and accumulate rewards. The counts is critical to maintain- our customers.” its 11 stores in the Charleston, a store-within-a-store for- program combines innovative ing customer loyalty,” said Online is another focus for S.C., market to CVS Caremark, mat that offers natural and digital marketing strategies Bill Baxley, SVP merchandis- Weis, which recently updated Kerr’s store base condensed to organic foods and homeo- with technology to expand ing and marketing. “It’s a its home page and announced 90 stores. Company chairman, pathic remedies. The stores customer touch points, and critical piece because it will let participation in such social president and CEO Tony Civel- devote roughly one-fourth of includes such social media us speak directly to shoppers media outlets as Facebook lo called the retrenchment “the their selling floor to such cat­ outlets as Twitter and Face- with targeted digital coupons and Twitter. Within an up- last step in a deliberate move egories as organic pastas, cof- book, as well as e-mail, Web and offerings to help us foster dated Healthy Living section to strengthen our core through fees and teas, salad dressings and point-of-sale access. a stronger relationship with tab, customers can submit nu- consolidation of our store base, and snacks, along with glu- “Some of these methods are our customers.” trition questions to Weis Mar- elimination of underperform- ten-free products and homeo- brand new, and others have Meanwhile, Kerr contin- kets’ registered dieticians, ing assets, diminution of debt pathic remedies. “This is a se- previously existed but are be- ues to score points as a com- learn about the Weis Healthy and focus of resources on prof- rious investment in ... natural, ing integrated with Kerr Re- munity health resource. Re- Bites program and research itable areas of growth in the organic choices as a healthy wards,” Eliezer explained. cently, thousands of patient popular wellness topics. emerging healthcare provider lifestyle,” said Raleigh store “So whether a customer is In­- interventions by Kerr Drug And in March the company environment.” manager Anthony Latini. ternet-savvy and hooked into pharmacists earned the chain completed an overhaul of its Civello acknowledged the To make space for the con- their mobile and social net- recognition from Outcomes flagship Lewisburg, Pa., store, chain’s exit from the region cept, Kerr eliminated such tra- works, or a regular store-coup­ Pharmaceutical Health Care marking its “store design of was “necessarily hard.” But ditional convenience items as on shopper, there’s a way to as the nation’s top provider of the future,” according to vice Kerr’s redoubled focus on its automotive, light bulbs, small participate in Kerr Rewards.” pharmacy-based medication chairman Jonathan Weis. The home state of North Carolina, appliances and hardware. The newest Kerr Rewards therapy management. It’s the new prototype features a rede- he said, “would ensure our In their place are some 3,000 option, launched in April for second year in a row Kerr has signed pharmacy and health- continued strong growth in products normally found in consumers in North Caro- won the honor. Outcomes and-beauty care department; our markets. Kerr Drug has health food stores and organic lina’s Research Triangle re- noted that Kerr pharmacists a new 30-seat café and cof- been repeatedly recognized foods outlets. “It’s brought in gion, is Kerr Mobile Rewards. served nearly 10,000 MTM- fee bar offering a selection of and honored nationwide people who have never been Through a partnership with eligible patients in 2008, sav- espresso drinks; and an in- and within the industry as in a Kerr store,” Eliezer said. Motorola and the use of 2-D ing more than $2 million in creased selection of deli, pro- an innovator in community On the marketing front, bar-code technology, custom- estimated costs. duce and seafood products.

29 • April 2010 DrugStoreNews.com Drug Store News RETAIL 2010PHARMACY A 50/NNUAL2010 REPORT

Save Mart continues to offer As part of its agreement and collects insurance re- Save Mart patients its “19-Minute Prom- Drugstore.com with Rite Aid, customers of imbursement payments for Continued from page 23 ise.” Through this program, Continued from page 27 the RiteAid.com Web site can prescription medications on spots on Fresno, Calif.’s, KMJ the pharmacy promises to fill chronic conditions as cancer, purchase pharmacy prod- behalf of Drugstore.com. radio station. This program a prescription in 19 minutes. HIV and multiple sclerosis, ucts from the Drugstore.com Drugstore.com said that provides health-and-wellness If the pharmacy exceeds that which are not carried by mail-order pharmacy, which in 2010 it will continue to fo- information for commuters, time, the customer receives a brick-and-mortar pharma- ships to the customer from cus on improving profitabil- and the spots also play inside $10 gift certificate for dinner cies and require special han- Drugstore.com’s distribution ity in its mail-order pharma- Save Mart stores. and Redbox movie rental. dling or service. center. Rite Aid adjudicates cy business.

Due to economic considerations, counts on other generic and Schnucks “ Fruth brand-name medications, Continued from page 25 Continued from page 26 and such other services and Illinois market area that many patients don’t refill prescrip- positioning the company as as eyeglasses and hearing provided H1N1 flu vaccina- the “new Fruth,” and high- aids, noted VP pharmacy tion for an $18 service fee. tions for chronic conditions, let alone lighting its long-standing Eric Lambert. The charge covered the cost heritage through its “Your In June, a second round of contracting Test-med Vac- take prescription prenatal vitamins for Hometown, Family Pharma- of messaging will tout the cination Services nurses. By cy” tag line. The company company’s new loyalty working with the nurses, wellness care.” has been serving southwest- program. Under the pro- Schnucks could extend vac- ern West Virginia and south- gram, shoppers will earn cination services to children Michael Juergensmeyer, ern Ohio since 1952. points with each purchase as young as 3 years of age. Schnucks The first program to be that are redeemable for a Additionally, this past sum- highlighted is the com- Fruth gift card. mer, Schnucks announced And in St. Louis, Schnucks district downtown, and this pany’s new generic drug Looking ahead, Messick that it would partner with opened a new format, dub­ allows customers there to discount program, which said the company is look- Atlanta-based SoloHealth, a bed Culinaria, which is posi- get their prescriptions filled enables patients to get up ing to expand its business leader in self-service health tioned to serve the commu- while they shop,” Simon said. to a 30-day supply of more by acquiring an indepen- screening, to provide EyeSite nity there with gourmet food “Also there are lots of workers than 300 generic drugs for dent pharmacy and imple- vision-screening kiosks to 30 and a pharmacy. “There is a downtown who can get their $4, or up to a 90-day supply menting pharmacies within stores in the St. Louis area. growing population in loft prescriptions filled as well.” for $10. It also will offer dis- hospital settings.

• MyPharmacyTrainer, a goods to its merchandise Leader Web-based training program Kinney Drugs Thrifty White mix this past year. “Buyers Continued from page 7 initially developed for Cardi- Continued from page 20 Continued from page 23 attended shows two or three our generic partners,” the nal’s Medicine Shoppe fran- together a program to teach The chain also experi- times a year to buy promo- company reported. “We are chise division, and designed uninsured patients how to mented with new front- tional goods to bring to the committed to higher service to boost Leader owners’ get free screenings for breast, end categories and had stores for quick sell-through, levels, greater transparency ability to provide immuni- cervical and colorectal can- some success with the and the results have been on customer incentives and zations and to help patients cer under a partnership with addition of in-and-out soft very good,” Boehler said. generic cost of goods, and a with such conditions as dia- the Cancer Service Program more consistent product sup- betes manage their disease. in Oneida, Herkimer and MTM in our pharmacies, especially in ply with fewer market dis- Cardinal’s toolkit for inde- Madison counties, N.Y. The “ ruptions or product switches pendents also includes the same month, it offered free conjunction with Mirixa Corp., continues should manufacturer supply Leader brand private-label glucose testing to custom- shortages occur;” offering, which has grown to ers at its Vermont stores un- to expand. In 2009, we completed 100% • Trustworth, a line of more than 670 OTC products der a partnership with six home health products and that return average gross local hospitals. of the nearly 700 cases presented to our durable medical equipment, margins of 50% and feature In May 2009, it began of- and the expertise to maintain satisfaction guarantees, ac- fering a prescription-dis­ stores for patient follow-up. the business; and cording to the company. count program, with 90-day ” supplies of around 350 ge- neric drugs for $11.99 to un- Gary Boehler, employee benefits pack- insured customers. Thrifty White Meijer age that includes everyday Continued from page 20 discounts on private-label that offers a range of health- vitamins, minerals, supple- be available at every Fred’s of 3.9%. Prescriptions were related services through a ments and organic food. Fred’s pharmacy, Efird said. up 7.4%. partnership with 4D Phar- While it isn’t ready to make Continued from page 20 Last year, Fred’s acquired And this year, Fred’s ex- macy Management Sys- any major announcements tion program realized a 17% 20 prescription files, con- pected to be aggressive on tems. Meijer provides em- on Be Well, Guglielmi said increase in the number of tributing to a total sales prescription file buys again, ployers that contract with the program continues to immunizations given in the increase of 5.4% within the especially as the company is 4D the chance to sign up add companies and remains past year. The ability to ad- pharmacy department, and flush with a $50 million cash for Be Well for an expanded in growth mode. minister immunizations will a comparable-sales increase surplus at year’s end.

30 • April 2010 DrugStoreNews.com Drug Store News