2011 rx 2011 total total stores rank ComPany sales* CorP. sales* stores WitH rx Page 1 Walgreens $46,700 $72,200 7,7701 7,7701 3 2 CVS Caremark 40,7002 107,1003 7,3274 7,271 4 3 Rite Aid 17,800 26,100 4,667 4,667 5 4 15,900 264,2005 3,8685 3,750 6 5 Cardinal6 13,700 15,900 6,380 6,380 8 6 7,200 90,400 2,435 1,955 9 7 Good Neighbor Pharmacy 7,200 8,220 3,667 3,667 7 8 Health Mart 5,900 7,300 2,900 2,900 10 9 3,900 43,600 1,678 1,310 11 10 American Associated Pharmacies 3,500 3,920 2,087 2,087 13 11 Target 3,400 68,500 1,763 1,612 12 12 Kmart 2,300 15,300 1,3057 9447 13 13 Supervalu 2,200 27,9008 2,434 797 14 14 Ahold9 2,000 25,100 756 565 14 15 1,600 27,00010 1,046 864 15 16 Costco11 1,540 64,900 1,046 864 15 17 Sam’s Club 1,450 53,800 611 540 16 18 Medicine Shoppe International 1,220 1,290 622 622 16 19 H-E-B 1,200 16,500 330 210 17 20 1,200 9,300 229 213 17 21 Hy-Vee 950 7,300 235 23612 18 22 Shopko 870 3,000 34013 30713 20 23 Winn-Dixie/Bi-Lo 784 9,700 688 493 22 24 Fred’s 656 1,900 700 325 19 25 ShopRite 640 12,800 240 199 20 26 Kinney Drugs 616 810 91 91 19 27 A&P 486 8,100 320 189 21 28 439 14,600 197 197 21 29 415 3,900 205 194 18 30 Hannaford 414 4,600 179 138 22 31 USA Drug 409 660 145 145 23 32 Kerr Drug 39014 57814 76 76 23 33 Care Pharmacies 326 343 82 82 25 34 300 4,300 204 133 25 35 Brookshire Grocery 300 2,100 151 113 24 FOOTNOTES 36 Sav-Mor 272 320 7815 7815 24 1 Includes only pharmacies and specialty pharmacies 2 Based on retail sales 37 Thrifty White Pharmacy 250 313 83 83 25 3 Includes pharmacy services segment revenue of $58.9 billion, 38 Discount Drug Mart 247 557 71 71 26 total retail sales of $59.6 billion 4 Retail stores 39 242 2,800 161 122 26 5 Includes 3,029 supercenters, 629 discount stores and 210 Neighborhood Market and other small-format stores 40 Raley’s 240 3,000 130 100 24 6 Includes 2,000 stores via Kinray purchase in 2011, but does not 41 Save Mart 225 4,600 230 108 26 include 622 Medicine Shoppe/Medicap U.S. franchise stores 7 U.S. Kmart stores only 42 Bartell Drugs 211 398 58 58 27 8 Excludes supply chain sales 43 K-VA-T Food City 210 2,100 106 76 27 9 U.S. stores only; includes entire USA division 10 Includes 53rd week 44 208 2,600 100 9516 27 11 U.S. stores only 12 Includes stores that operate satellite or clinic pharmacies 45 Marc Glassman 146 1,100 62 44 28 13 Includes addition of 191 Pamida stores (158 with pharmacies) 46 Navarro Discount Pharmacy 113 328 31 30 28 14 Including employer-based clinical services, specialty and institutional pharmacy sales, etc. 47 Fruth Pharmacy 113 135 25 25 28 15 All franchised 48 Lewis Drug 76 152 34 34 29 16 Excluding four specialty pharmacies 17 Ritzman acquired 11 pharmacy operations within Buehler’s 49 Pharmaca Integrative Pharmacy 54 94 24 24 29 Fresh Foods in October 2011 50 Ritzman Pharmacy17 36 44 20 20 29

* All sales in millions; refl ect most recent fi scal year 2 • April 2012 DrugStoreNewS.com TOP 50 SCORERS Working to be ‘more than a drug store’ By Michael Johnsen patients are taking on their way to well these ates outside of the Express Scripts pharmacy days. And fifth is keeping the cost of the whole network, a storyline that has become all the It almost seems that Walgreens is striving production in check — Walgreens also is in the more predominant following the Federal to become that drug store that people drive process of rolling out a new point-of-sale sys- Trade Commission’s approval of the Express by five other pharmacies to get to. It’s not just tem that accelerates its speed-of-service and Scripts-Medco merger. Express Scripts repre- their strategic placement of gee-whiz merchan- will be compatible with the loyalty card pro- sented 88 million prescriptions for Walgreens dising technology or their golly-gee style of gram Walgreens plans to launch later in 2012. in 2011, compared with 125 million prescrip- ready-to-help customer service that’s getting In addition to its more than 7,700 brick-and- tions associated with Medco members. Wal- them there — though that’s certainly part of it mortar points of care, 355 workplace clinics greens’ Medco book is shrinking, however, for the 110-year-old chain. It’s also Walgreens’ and 83 infusion and respiratory services fa- to 108 million prescriptions at the top of 2012 creation of a retail entity that better manages cilities, Walgreens also is improving its “Well and a projected 74 million prescriptions at outcomes and better provides patient consulta- Experience” through its continued integration the top of 2013, due to payer migration out of tions, better controls drug spend through best- of Drugstore.com. As part of that integration, the Medco PBM. in-class generic utilization and better guides Walgreens opened a new e-commerce dis- people to the most appropriate point of care tribution facility in Edwardsville, Ill., earlier — all in the same day, all with the same patient. this year that is expected to improve cus- HQ: Deerfield, Ill. Walgreens And whether Walgreens is connecting to that tomer order delivery time by 50%. “Patients 2011 sales: $72.2 billion patient through his or her employer or through are seeking value, quality and personal ser- % change vs. 2010: 7.1% his or her smartphone, those are the differen- vice as the healthcare system continues to tiators that are helping to set Walgreens apart change through both legislation and market No. of stores: 7,770* from the traditional drug store model that’s dynamics,” Wasson noted. “Patients and No. of stores with Rx: 7,770* predominant in the marketplace. payers are seeking new solutions to address Avg. store size: 14,700 sq. ft. The opening sentence of the chain’s letter to the growing need to provide convenient ac- Rx sales: $46.7 billion shareholders best encapsulates what Walgreens cess to quality health care and, at the same % of sales from Rx: 64.7% has been all about in the past year, and will be time, rein in skyrocketing healthcare costs.” Sales per store: $9.3 million all about in the coming year. “Our vision of ‘My It’s the pursuit of those value proposi- Walgreens’ is more than a drug store — we are tions that has been buttressing Wasson and * Includes only retail pharmacies and specialty pharmacies becoming a retail health and daily living des- Walgreens through 2012 as the chain oper- Source: Company reports tination, providing convenient, multichannel access to goods and services with best-in-class customer experience,” wrote president and CEO Greg Wasson. “Our pharmacies ... serve as a centerpiece in improving patients’ overall health, ... improving access to care and lowering costs through an expanded scope of community- based health-and-wellness solutions.” Wasson in January outlined Walgreens’ five long-term objectives to get the chain where it needs to be in order to realize that vision. First is the staging of its “Well Experience” format, which features many of the merchandising and product assortment elements on display in the chain’s and Chicago flagship loca- tions. Second is the recasting of its pharmacists into leading roles in counseling patients on the best pathways to well. Third is the inclusion of the supporting cast into the whole “Well Experience” by fostering a retail culture that actively engages customers. Fourth is moving its banner from roadside billboards and onto smartphone platforms, a pathway that more

3 • April 2012 DrugStoreNewS.com TOP 50 SCORERS leveraging ‘integration sweet spots’ By antoinette alexander lion, up from the $6.8 billion provided on Ana- pleted by year-end 2011, and it expects to add lyst Day in December 2011. The estimate for the roughly 50 more locations in 2012. CVS Care- CVS Caremark closed out 2011 on a high number of new Medicare Part D lives for 2012 mark will continue to drive sales through seg- note, and 2012 — and beyond — is looking to increased to 200,000. mentation and store clustering initiatives and, in be even greater as the company leverages its In addition to net new business wins, the 2012, will test several demographic-based seg- “integration sweet spots” and officially emerges company expected an additional $5.5 billion mentation approaches. as a new category of pharmacy provider with in incremental revenue in 2012 associated with Meanwhile, MinuteClinic is playing a valuable an integrated model that no other can replicate. the acquisition of the Universal American Corp. role in healthcare delivery. It is continuing to ex- “When you think about the business that Medicare Part D business in 2011. pand the scale of its practice, with more than 1,000 we operate, we have a $120 billion enterprise; In light of this, the total 2012 impact rev- full-time clinics slated to be in operation in 2016, we have about 7,400 CVS/pharmacy stores; enues stand at $12.7 billion, which is up from as well as expanding its scope of services. In fact, we operate one of the leading pharmacy ben- the $12.3 billion projected on Analyst Day. nonacute care is MinuteClinic’s fastest-growing efit management companies in Caremark; Furthermore, CVS Caremark recently un- segment due, in large part, to the rise in chronic and MinuteClinic ... plays an important role in veiled the next generation of its Maintenance diseases and the primary care physician shortage. healthcare delivery. So we think about those Choice program. Through version 2.0, which three businesses operating as best-in-class busi- will be broadly available in January 2013, there

ness units,” president and CEO Larry Merlo are no design plan changes required to gain CV s C HQ: Woonsocket, R.I. told Drug Store News in a recent interview. “Yet 90-day economics for patients and payers, and if you just laid out each of the businesses in a there’s complete flexibility for consumers to 2011 sales: $107.1 billion* circle and brought them together, those circles alternate between mail and CVS/pharmacy. % change vs. 2010: 11.8% aremark are going to overlap. And that overlap is what CVS Caremark also is advancing its Phar- No. of stores: 7,327** we refer to as our integration sweet spots.” macy Advisor program. As previously report- No. of stores with Rx: 7,271 These integration sweet spots are prod- ed, the company plans to roll out Pharmacy Avg. store size: 8,000 – 13,000 sq. ft.† ucts and services that no stand-alone PBM or Advisor from diabetes to several cardiovas- Rx sales: $40.7 billion†† stand-alone pharmacy retailer can provide to cular conditions in 2012, and with Pharmacy % of sales from Rx: 68.3% its clients, members or customers. The busi- Advisor 3.0, the company is building a com- Sales per store: $8 million ness model clearly has hit its stride, and, about prehensive clinical program for multiple a year after they called for the split of CVS chronic conditions. * Includes pharmacy services segment revenue of $58.9 billion, total retail sales of $59.6 billion Caremark’s PBM business, analysts now have Within the retail segment, CVS Caremark ** Retail stores † Most new stores changed their tune — in a big way. continues to make progress on its clustering †† Based on retail sales “The 2013 selling season is the most promising initiatives, with 420 Urban Cluster stores com- Source: Company reports one since CVS acquired Caremark. This reflects the powerful combination of a business model that has come into its own — with 110 million re- tail interventions lowering costs for payers — just as its largest competitors have meaningful uncer- tainties in their businesses,” stated Guggenheim analyst John Heinbockel in a recent research note. CVS Caremark turned the PBM business from a decline in operating profit in the first half of 2011 to growth in the back half, and now, with its Consumer Engagement Engine in place, the powerhouse is rolling out differentiated prod- ucts and services (e.g., Maintenance Choice and Pharmacy Advisor) that are resonating in the marketplace. The proof is in the numbers. During its fourth-quarter conference call in early February, CVS Caremark reported that the 2012 selling season in the PBM segment contin- ued to be on the upswing with a 98% retention rate. Net new business wins totaled $7.2 bil-

4 • April 2012 DrugStoreNewS.com TOP 50 SCORERS Wellness+ program, stores boon for raD By alaric dearMent healthcare education, information on common 3-D holographic kiosks in its stores. The kiosks medical problems and identification of appro- include a display unit that shows 3-D images The spike of speculation occurring in the priate provider options. When the company “floating in space” without the need for ob- middle of March after the release of a report announced its third-quarter results, president servers to wear 3-D glasses and, according to by a Wall Street analyst that explored the and CEO John Standley said the program had Provision, project images that look so real that prospects of an acquisition of Rite Aid by Wal- gained traction, and the company was consid- people feel compelled to reach out and try to greens has long since died down. One reason ering expanding it. touch them. At the time, Rite Aid planned to could be that Rite Aid’s programs and initia- Immunizations have been another strong install the displays in 200 stores, with plans to tives to grow sales have started paying off. area for the chain and have turned out to be roll them out to the entire chain eventually. For the past year, the Camp Hill, Pa.-based a major contributor to its pharmacy comps. chain has been growing its sales steadily and In the third quarter, Rite Aid had trained narrowing its losses, which stood at $52 million more than 11,000 of its pharmacists to ad- HQ: Camp Hill, Pa. when it released its third-quarter 2012 results, minister vaccines to patients, and had im- 2011 sales: $26.1 billion the most recent results available at press time, munized 1.4 million customers against flu. r

down from $92.3 million in the second quarter. The chain expected to immunize a further % change vs. 2010: 3.6% ite aiD Much of this growth comes thanks to the 1.5 million people, for a total of more than No. of stores: 4,667 Wellness+ loyalty card program, whose mem- double the number of people it immunized No. of stores with Rx: 4,667 bership at third quarter 2012 stood at 47 million. in 2010. The company’s efforts won recogni- Avg. store size: 12,400 sq. ft. In January, the company launched Load2Card, tion in December 2011, when the American Rx sales: $17.8 billion which allows members to download coupons Pharmacists Association gave Rite Aid the % of sales from Rx: 68.1% directly to their cards. In September 2011, the Immunization Champion Award in the na- Sales per store: $5.6 million company launched Wellness+ for Diabetes, an tional corporation and institution category. extension to Wellness+ designed for diabetes In December, Rite Aid made a deal with Source: Company reports patients and caregivers, which by third quarter Chatsworth, Calif.-based Provision Interac- had more than 90,000 people enrolled, while tive Technologies whereby it would place more than 200,000 unique visitors had been to Rite Aid’s section of WebMD, which has part- nered with the retailer in the program. The company also continued expanding its new Wellness store format, with 159 Wellness stores in operation as of third quarter 2012. Rite Aid plans to remodel another 300 stores by the end of fiscal 2012 and staff them with Wellness Ambassadors, specially trained members of the staff who walk the aisles with iPads to an- swer customers’ questions about medications and other health products and services. The company introduced a range of other new services as well. In September 2011, it an- nounced a partnership with OptumHealth to become the first retail pharmacy to provide “virtual clinics” through the launch of Now- Clinic online care services at select stores in the Detroit area. The program is designed to allow Rite Aid customers to interact in real time with doctors and OptumHealth nurses. Custom- ers use the Internet to have private consulta- tions with doctors about symptoms and obtain guidance, diagnoses and prescriptions for certain medications, as well as have conver- sations with nurses who can provide basic

5 • April 2012 DrugStoreNewS.com TOP 50 SCORERS Familiar strategy yields familiar results By Mike troy points to the mid-90% range. The company also to add between 14 million and 15 million sq. ft. has set a goal of eliminating 100 basis points from of new space for a total of between 210 and 235 Walmart is rolling into 2012 with a renewed its expense structure, which is seen as a key en- new units. Small-format stores will account for sense of optimism stemming from indications abler of being able to sell for less than competitors about 80 to 100 of those units, with the major- that course-correction strategies implemented while maintaining profits. It is a back-to-basics ity of those being Neighborhood Market stores throughout 2011 are bearing fruit and will lead approach, and favorable early indications have that are said to generate above industry aver- to an even greater bounty in the coming year. Walmart convinced it is now on the right track. age results, such as a 5% comps increase in the The company broke its streak of two con- “To put it simply, our business model is work- fourth quarter. The Walmart Express stores re- secutive years of negative same-store sales ing, and we continue to drive progress on three main a work in progress with a clear strategy growth in the third quarter when its U.S. stores major fronts,” said Walmart U.S. president and for expansion yet to emerge. division posted a 1.3% comps increase and then CEO Bill Simon, referring to assortments, pric- The prospect of accelerating same-store the momentum continued in the fourth quar- ing and in-stock position. sales growth and increased square footage has ter when comps increased by 1.5%. And now, Going forward, the thing to watch at Walmart Walmart positioned to capture an even larger with spring off to a strong start thanks to unsea- is whether customer traffic continues to build share of the U.S. market, including the health- sonably warm weather, Walmart appears well because the company already captures a large and-wellness area. positioned to handily meet or exceed its first- percentage of its most loyal shoppers’ dis- quarter guidance, which called for same-store posable income. Future gains will be driven sales to increase up to 2%. by additional traffic and sales from custom- HQ: Bentonville, Ark. Past gains and expectations of future growth ers who temporarily defected from Walmart are driven by broad-based strength, which when the company deviated from its core 2011 sales: $264.2 billion* Walmart includes contributions from the health-and- value proposition of offering low prices on % change vs. 2010: 1.5% wellness categories. In the fourth quarter, the a broad assortment of in-stock merchandise. No. of stores: 3,868* health-and-wellness business delivered a low Almost overlooked in the focus on No. of stores with Rx: 3,750 single-digit increase with pharmacy, over-the- Walmart’s efforts to improve its existing op- Avg. store size: 182,300 sq. ft.† counter and optical businesses all reporting erations is the fact that the company contin- Rx sales: $15.9 billion positive comps, according to the company. ues to grow square footage at a fairly rapid % of sales from Rx: 6% These categories combined last year accounted clip. Not as rapid on a percentage basis as a Sales per store: $68.3 million for 11% of Walmart’s total U.S. sales of $264.2 decade ago, but rapid nonetheless. Last year billion, and going forward are poised to grow saw the addition of 119 supercenters and 27 * Includes 3,029 supercenters, even more rapidly if some other variables play small-format stores, including experimental 629 discount stores and 210 Neighborhood Market and other small-format stores out in Walmart’s favor. Walmart Express stores, which total 9.6 mil- † Supercenters only The most notable of this is strengthening lion sq. ft. This year, the company expected Source: Company reports, DSN estimates of shopper traffic. If Walmart is able to regain customer traffic, as it contends it did during the fourth quarter, then it will be able to ex- pose more shoppers to a store experience that is unmistakably Walmart. That’s because fea- ture displays have been returned to store aisles, merchandise assortments have been deepened and in-stock positions have improved, all while the company has reinvested in price and grown more aggressive with marketing. Walmart deviated from its long-standing strat- egy and overreached on SKU-rationalization efforts, and then squeezed its supply chain too hard to limit inventory growth. The strategies backfired, and the company has spent the past 18 months adding back 10,000 products and refill- ing the inventory pipeline and the on-shelf avail- ability of merchandise so that the in-stock per- centage has improved by more than 600 basis

6 • April 2012 DrugStoreNewS.com TOP 50 SCORERS gnP scores high with consumers again By JiM Frederick last year with the rollout of ABC Passport. kit for GNP pharmacies is a robust, easy-to- The wholesaler describes Passport as “an inte- navigate website for health consumers. The The surveys prove it: Pharmacy customers, grated procurement platform for all customer site, through which patients can link to any of particularly those who like the personal at- interactions with ABDC, which streamlines the network’s pharmacies, includes a Wellness tention and care of an independent pharmacy order entry, gives our customers robust report- Center that covers a host of topics on such is- owner, like the brand of service provided by ing functionality and is entirely Web-based.” sues as proper nutrition, baby care, eating Good Neighbor Pharmacy. And the huge, Via its PRxO Generics Solutions program, disorders, ankle sprains and even bedbugs, 4,000-store network of independent pharma- ABDC also is one of drug wholesaling’s most all organized for users in their teens, early-to- cies is drawing on the support of its powerful aggressive proponents of generic drugs, both mid-adulthood and older years. wholesale partner, AmerisourceBergen Corp., as a source of value to patients and as a high- Also available at GoodNeighborPharmacy. to maintain their loyalty. margin buffer for its independent pharmacy com are recommended immunization schedules For the second year in a row in 2011, GNP customers beset by tight third-party reim- by age group, a medical dictionary, an extensive tied for “Highest in Customer Satisfaction bursement levels and other profitability chal- guide to medications, a guide to symptoms and with Chain Drug Store Pharmacies” in a na- lenges. President and CEO Steven Collis, who what they could mean, and calculators so pa- tional consumer survey by J.D. Power and succeeded R. David Yost as ABC’s top execu- tients can track “everything from calorie burns Associates. Among the reasons why, accord- tive upon Yost’s retirement last July, indicated to heart rates to pregnancy due dates.” ing to GNP and AmerisourceBergen, were early this year that the company was posi- the personal service provided by the group’s tioning itself to capitalize on the “tremen- pharmacists and pharmacy staff, the ease of dous wave of brand to generic drug conver- HQ: Chesterbrook, Pa. the prescription ordering and pickup process, sions” accompanying the flood of patent 2011 sales: $8.2 billion the store shopping experience, and the ability expirations on big-selling branded drugs. of stores in ABC’s Good Neighbor service um- “This so-called patent expiration wave % change vs. 2010: NA gnP brella to provide “cost competitiveness.” represents one of the most compelling op- No. of stores: 3,667 That value perception is enhanced by GNP’s portunities ABDC has ever had to demon- No. of stores with Rx: 3,667 Prescription Savings Club card program, which strate value to generic manufacturers and Avg. store size: 2,000 sq. ft. offers discounts on more than 5,000 branded healthcare providers,” Collis noted. “As Rx sales: $7.2 billion and generic medicines at any GNP pharmacy. payers and consumers seek to contain the % of sales from Rx: 88% GNP bases its customer-drawing appeal on costs of health care, our world-class proprie- Sales per store: $2.2 million “personalized care that only a locally owned tary generic programs deliver excellent val- pharmacy can offer.” ABC’s pharmaceuti- ue for healthcare providers and patients.” Source: Company reports, DSN estimates cal distribution division, AmerisourceBergen Another key element in ABDC’s tool- Drug Corp., adds the backup muscle, provid- ing purchasing and third-party contract ne- gotiating power, economies of scale, sophisti- cated merchandising and advertising support, comprehensive sales and profit-modeling tools for generic drugs, and robust informa- tion and online technologies. Independents under the GNP umbrella also get “private-label marketing support, busi- ness coaching and other services,” accord- ing to the company. But key to that support, of course, is AmerisourceBergen’s coast-to- coast network of 26 distribution centers in the — another nine DCs serve ABC pharmacy customers in Canada — to keep in- dependents supplied via some 20,000 average daily shipments. For those pharmacies, the process of reor- dering and receiving shipments of drugs and other supplies was made significantly easier

7 • April 2012 DrugStoreNewS.com TOP 50 SCORERS Cardinal shifts from products to patients By JiM Frederick increased our footprint in independent phar- Those in-store centers focus on pharmacist- macy,” Barrett said, it also will “accelerate the delivered services like dietary counseling and Health services and wholesale drug giant growth of our generic franchise. We ... put a medication reviews, as well as product sales Cardinal Health now calls itself nothing less great deal of emphasis on growing our position they will generate revenue for Cardinal’s phar- than “the business behind health care,” with in retail independent pharmacy.” The Kinray macy customers “outside of just the product “a unique vantage point from which to drive acquisition, Barrett went on, “added more than sales,” Lawrence said. efficiency through the system” and improve 2,000 customers to this channel and significant- The ultimate goal, he told DSN, will be to get “the cost-effectiveness of care.” ly shifted our business mix.” health plan payers to fully embrace and pay for It’s no small claim, but Cardinal wields enough That shift, said Cardinal’s CEO, “is not the services offered by pharmacists in the care clout to lend it credibility. Ranked the nation’s trivial. Approximately two years ago, we centers. “We haven’t gotten there yet,” Law- 19th-largest company by Fortune, the company highlighted the need to improve the business rence admitted. “It’s a path we started ... by wields a vast drug distribution and support net- mix in our pharmaceutical segment. Since that creating the capabilities. ... Now that we have work for retail, hospital and institutional phar- time, our percentage of nonbulk sales has gone some data, we’re going back to managed care macies, as well as a major business providing from about 50% to 57%, and the number of re- and saying we have a network of pharmacists surgical supplies and other health products and tail independent pharmacies we serve has also [who] are experts in diabetes care.” health informatics. Cardinal also is a leading cen- increased by about 50% to more than 7,000, ter for maximizing generic drug utilization and reflecting both organic growth in our cus- profitability in the retail pharmacy setting. tomer base and the acquisition of Kinray.” HQ: Dublin, Ohio Within that arena, the wholesaler now ser- Last summer, Steve Lawrence, Cardinal’s 2011 sales: $15.9 billion Car D vices some 7,000 drug stores — including inde- SVP retail independent sales, said the com- % change vs. 2010: 54%* pendently owned single and multi-store phar- pany’s focus has shifted from “selling prod- macies under Cardinal’s old Leader Pharmacy ucts to talking about taking care of patients.” No. of stores: 6,380*

network, unaffiliated independents and chains, In line with that, Cardinal has brought out No. of stores with Rx: 6,380* inal and stores formerly served by Kinray. a suite of services for its retail pharmacy Avg. store size: 2,600 sq. ft. What’s more, said Cardinal chairman and operators, dubbed Specialty Care Centers, Rx sales: $13.7 billion CEO George Barrett, the company is two years which arm pharmacists with the tools and % of sales from Rx: 86% into a renewal campaign aimed at “strengthen- training to market products and services in Sales per store: $2.5 million ing our strategic position.” Among its goals, he such areas as diabetes care more effectively noted last fall, are “driving generics by expand- and profitably. Examples include Cardinal’s * Includes 2,000 stores via Kinray purchase in 2011, but does not include 622 Medicine ing our footprint in retail independent pharma- Diabetes Care Center and, more recently, its Shoppe/Medicap U.S. franchise stores cy” and “establishing our presence in the fast- Heart Health Care Center. Source: DSN estimates growing specialty pharmaceutical segment.” To that end, Cardinal scored big break- throughs in 2011 with its purchases of P4 Healthcare, a major provider of specialty phar- maceutical services, and Kinray, the highly suc- cessful distributor of drugs and other products and services to pharmacies concentrated in New York and . Via its acquisition of P4, Cardinal leapt into oncology and specialty pharmacy. Barrett told investment analysts that the purchase boosted its “capabilities in clinical pathways manage- ment, giving us greater strength with new sets of customers and partners upstream and en- abling us to build collaborative relationships between payers and providers.” Cardinal’s national reach as an independent pharmacy network took a big leap forward in early 2011 with its purchase of Kinray. The $1.3 billion deal not only ”dramatically

8 • April 2012 DrugStoreNewS.com TOP 50 SCORERS kroger reaps sales, loyalty harvest By JiM Frederick But we don’t believe our profits will suffer be- offering pet prescriptions in all its pharmacies, cause the gross profit rate on [generics] is higher.” capping a gradual rollout of the new service Food and pharmacy powerhouse Kroger With 2,435 and multidepart- for pet owners. Adding drawing power to that spent heavily to seed the ground for addition- ment stores under two dozen local banners proposition was the chain’s decision to extend al growth as it weathered the Great Recession. in 31 states, Kroger is the largest supermar- its $4 generic price promotion to its new pre- Now the company is reaping a harvest of ris- ket chain in the United States, behind only scription service for animals. ing sales, while some of its competitors con- Walmart in grocery sales. But with 1,955 in- And since acquiring The Little Clinic in 2010, tinue to struggle. store pharmacies, it also is one of the nation’s Kroger also has extended its reach as a conve- Kroger boosted revenues a strong 10.2% to largest pharmacy operators. nient care provider. The Little Clinic now op- $90.4 billion in fiscal 2011, thanks in part to ris- That makes the retailer a formidable com- erates 80 walk-in care centers in select Kroger, ing gas prices. But even factoring out results petitor in both arenas. “By offering fuel savings Fry’s and stores in Ohio, Ken- from its more than 1,000 fuel centers, the chain and $4 and $10 generics — along with everyday tucky, , , and Colo- achieved a 5% increase in sales and a solid savings and benefits from our loyalty program rado. The Little Clinic staff “will be specifically 4.9% gain in same-store revenues. Net earn- — we encourage our customers to visit Kroger selected, trained and recognized to provide the ings came in at $602.1 million. for all of their groceries, health and beauty compassion, knowledge, respect and personal “Kroger increased identical products, prescriptions and other household skills to create a superior customer experi- sales. We grew market share. We effectively items, and fuel,” Dillon reported. ence,” Kroger asserted. used free cash flow to reward shareholders Kroger pharmacies filled some 140 million and invested wisely to continue to win cus- prescriptions last year and continued a steady tomer loyalty,” Kroger chairman and CEO Da- expansion of pharmacy- and clinic-based HQ: Cincinnati vid Dillon told analysts on March 1. “Impor- health services. Besides a growing ability to 2011 sales: $90.4 billion tantly, we also balanced cost reductions with provide immunizations and help patients % change vs. 2010: 5%* kroger investments in our ‘Customer 1st’ strategy to manage their drug therapy, some company No. of stores: 2,435 increase ... operating margin for the year.” pharmacists now provide health and preven- Kroger’s nine-year-old partnership with tive services, including diabetes management No. of stores with Rx: 1,955 † data management firm dunhumbyUSA has in coordination with a team that includes reg- Avg. store size: 63,000 sq. ft. boosted its ability to leverage its customer loy- istered dietitians and certified diabetes edu- Rx sales: $7.2 billion alty card POS data and generate what it calls cators. Customers at some locations also can % of sales from Rx: 8% “unparalleled personalized marketing plans participate in fitness, nutrition, weight-loss Sales per store: $37.1 million that reward our most loyal customers. It al- and smoking-cessation programs, as well as * Excluding gasoline sales lows us to segment our customer base and biometric screenings and other offerings. † Average for new food/drug combo prototype design customized offerings for the individual In January 2012, the company also began Source: Company reports, DSN estimates needs of each segment,” Kroger reported. The company’s huge pharmacy operation also helped drive its steady upswing. “Our natural food, pharmacy, produce and deli departments posted the strongest results,” Dillon noted. Even with the anticipated hit from “the ex- pected negative effect on sales from prescription drugs coming off patent,” Kroger still expected same-store sales to move up 3% to 3.5% this fis- cal year. But company leaders acknowledged that the branded-drug patent cliff — and the wave of lower-priced generics it unleashes at pharmacy counters — would slow top-line sales. “Our estimate of the effect of the drugs com- ing off patent and going to generic on our total book of business is 50 basis points,” Kroger SVP and CFO J. Michael Schlotman predicted. “That’s not 50 basis points on pharmacy sales, that’s the overall reduction in business for the company.

9 • April 2012 DrugStoreNewS.com TOP 50 SCORERS more owners turning to Health mart By JiM Frederick Other recent additions to the franchise network’s pharmacies in suburban , agreed. “It’s private-label program include smoking-cessation collective buying; it’s not really losing your in- More independent pharmacy owners are and analgesic products. Most recently, a line of dependence,” he told DSN. As a franchisee, he grabbing the Health Mart lifeline. Originally Health Mart OTC upper respiratory treatments added, he can participate in “national advertis- welded to McKesson as part of the company’s for allergies, colds and flu debuted in early April. ing, competitive buying power and help get- acquisition of FoxMeyer in the mid-1990s, According to Matt Lowe, McKesson’s VP retail ting onto contracts with insurance companies Health Mart quickly emerged as the proving marketing, such products “enhance the pharma- that I might not be able to get onto myself.” ground for McKesson’s constantly evolving cist’s image as a healthcare provider,” and Health McKesson’s investment in its franchise op- suite of solutions for its independent pharma- Mart will add additional healthcare categories to eration has paid big dividends. Health Mart cy customers. But it remained a relatively small its store-brand selection throughout 2012. has exploded in size and reach, now number- operation with limited geographic reach and At the front of the store, Health Mart fran- ing more than 2,900 stores in all 50 states. impact, with just 240 stores in the early years of chisees can stock any of more than 1,000 value- What’s more, the franchise scores high in the 21st century. priced products under the company’s Sun- both national customer recognition and sat- By 2005, that quiet scenario was fast giving mark brand. They also can tap McKesson’s isfaction. Last year, the pharmacies tied with way to a radically new vision by McKesson for FrontEdge system, which the company calls a Good Neighbor Pharmacy for “Highest in Cus- its Health Mart franchise network under Tim “strategic planning, merchandising and price tomer Satisfaction with Chain Drug Store Phar- Canning, VP franchise marketing. McKesson, maintenance program that helps independent macies” in a national consumer survey by J.D. convinced of the need for a new growth vehicle pharmacies maximize store profitability.” Power and Associates. that would showcase best-practice ideas for in- Health Mart franchisees, noted McKesson, dependent drug stores, encourage their adop- become “part of a network of thousands of

tion by its pharmacy customers and improve in- best-in-class independent pharmacies benefit- HQ: San Francisco HealtH m art dependents’ chances for success, began pouring ing from a comprehensive portfolio of pro- 2011 sales: $7.3 billion resources into the Health Mart concept. grams that helps [them] compete and improve % change vs. 2010: 5.8% Thus was born a new and dramatically de- profitability.” And while aligning themselves No. of stores: 2,900 signed store prototype for the nascent Health with “a national brand widely recognized No. of stores with Rx: 2,900 Mart network, along with a growing investment for superior customer service,” independent in information technology, training in clinical pharmacists who enlist in the franchise pro- Avg. store size: 1,000 – 10,000 sq. ft. care for pharmacy owners, new merchandising gram nevertheless “maintain full control over Rx sales: $5.9 billion and marketing tools, a vastly improved private- how you position and market yourself in your % of sales from Rx: 81.2% label program and sophisticated software tools community,” according to McKesson. Sales per store: $2.5 million like EnterpriseRx to help those owners compete Jonathan Marquess, a Marietta, Ga.-based more effectively and profitably. Some merchan- pharmacist who owns three Health Mart Source: DSN estimates dising and display programs — like the Diabe- tes Life Center featuring diabetic care products, along with educational and promotional materi- als in a carefully developed in-store planogram — have gained widespread adoption among Health Mart owners and broad recognition among consumers, said Tony Moye, a multi- store franchisee based in McDonough, Ga. Among the latest competitive weapons avail- able to franchisees is a new line of Health Mart- brand vitamins and nutritional supplements, launched in February. The launch was accompa- nied by the rollout of a new Web-based informa- tional tool called the 2012 Vitamin Finder, which gives personalized vitamin recommendations based on wellness goals. The new store-branded vitamin program fol- lows the rollout last November of a Health Mart-branded line of diabetes care products.

10 • April 2012 DrugStoreNewS.com TOP 50 SCORERS safeway sets sights on nutrition needs By JiM Frederick most recent annual report. ing well beyond the company’s own shelves “Safeway’s pharmacies offer more than just and website, however. In mid-March, Safeway For food and pharmacy giant Safeway, the prescription filling and health-related advice,” joined with the U.S. Department of Agricul- lingering aftermath of the Great Recession the company reported in 2011. “They also pro- ture’s Center for Nutrition Policy and Promo- appears to be officially over. The Pleasanton, vide immunizations, travel medicines, medi- tion in a national drive to develop and promote Calif.-based retailer notched a healthy 6.3% cation therapy management and point-of-care dietary guidance that links scientific research sales gain in 2011 — restoring growth momen- screening, among other services.” to the nutrition needs of consumers. tum after a gain of just half a percent in sales Calling “the health and well-being of our In executive news, Robert Edwards was the previous year — with $43.6 billion in total customers ... a top priority,” Safeway also ex- promoted to president on April 9. Edwards revenues and net earnings of $516.7 million. panded that directive in its food aisles. In the had served as Safeway’s EVP and CFO since “In 2011, we focused on building loyalty to latest expansion of a healthy-eating program 2004. He now will have overall responsibil- drive sales, continued to control costs and uti- that began in earnest in 2005 with the rollout ity for the company’s retail operations, mar- lized our strong free cash flow ... to enhance of its O Organics line of natural foods, the keting, merchandising, corporate brands, stockholder value,” said chairman and CEO chain launched SimpleNutrition, an in-store manufacturing, distribution and finance func- Steven Burd. shelf tagging program and online informa- tions. He will continue as CFO until a succes- As of Dec. 31, 2011, 78% of the company’s tion resource that the company says “makes it sor is named to the position. 1,678 stores in the United States and Canada — easier for shoppers to make better nutrition more than 1,300 units altogether — contained choices on food and beverages.” pharmacies. In addition, 99% of those stores Safeway calls SimpleNutrition a first step HQ: Pleasanton, Calif. offered deli counters and 70% featured Star- for its customers in a campaign to support

2011 sales: $43.6 billion saFeW bucks coffee bars. What’s more, the chain con- healthier dietary choices. To that end, the tinues a top-to-bottom, nationwide renovation program employs green shelf tags that high- % change vs. 2010: 6.3% program; as of year-end 2011, 87% of its stores light up to two of 22 different ingredient No. of stores: 1,678 had been converted to its Lifestyle format. benefits (e.g., “gluten-free,” “organic,” “so- No. of stores with Rx: 1,310

That “Lifestyle” prototype, the basis for Safe- dium-smart” or “made with whole grains”). Avg. store size: 47,000 sq. ft. ay way’s hugely expensive multiyear store mod- In late 2010, the company also launched Rx sales: $3.9 billion ernization program, offers customers “wood- Open Nature, an all-natural product line that % of sales from Rx: 8.9% like flooring, relaxing earth-toned decor and “already achieved more than $100 million in Sales per store: $26 million subdued lighting with spotlights on featured sales in 2011,” according to the company. products” for “a warm, inviting ambience,” ac- Health-and-wellness initiatives are mov- Source: Company reports cording to the company. Accompanying that overhaul is the ongoing campaign to shed older, less productive stores. “During 2011, we opened 25 new stores, com- pleted 29 Lifestyle remodels and closed 41 stores, which brought our store base to 1,678 locations at year-end,” Burd told shareholders. “With the majority of the Lifestyle remodels now behind us, we will begin to allocate some of our cash flow to other opportunities.” That means more capital for “new stores, remodels, retail shopping center development, manufacturing plants, distribution facilities and information technology,” according to Safeway. It also means additional resources for health and prevention initiatives in both the pharmacy and grocery departments. With prescriptions generating $3.87 billion in total revenues, Safeway’s more than 1,300 in-store pharmacies accounted for 8.9% of total sales in fiscal 2011, according to the company’s

11 • April 2012 DrugStoreNewS.com TOP 50 SCORERS target extends wellness outreach By JiM Frederick The next two years will be a momentous time store operations, that strategy will be based for the 1,765-store retailer. As part of a 20-store on a pharmacy franchise model, which Target Target has spent decades perfecting its expansion this year, the company will unveil its said “will allow individual pharmacist own- unique retail model as an upscale, fashionable first five CityTarget stores as it focuses on dense- ers to own and operate pharmacy businesses mass merchandise discounter, creating in the ly populated markets with a highly concen- within Target’s Canadian stores.” process a hugely successful market niche. In- trated mix of products geared to city dwellers. Target began its search for franchise owners creasingly, however, this thriving retailer also “We expect to open our first small urban-format in March. “We are committed to providing su- is staking a bigger claim in the health arena. stores in Seattle, Los Angeles, Chicago and San perior community-based health care,” Fisher Target has a new marketing tagline, “Find Francisco in 2012,” the company reported. said recently. “We have worked hard to under- your Feel Good,” and a new promise: that con- Target also will move beyond the United stand the Canadian healthcare landscape and sumers can find “all your health essentials in States for the first time with the opening of believe our unique pharmacy franchise model one place.” It backs that message with a national its first stores in Canada in March or April will greatly appeal to pharmacists while best network of more than 1,600 in-store pharmacies 2013. It will be a major incursion. “Through serving the needs of patients in Canada.” and major investments in pharmacy technol- the purchase of leasehold interests in up to ogy. In turn, those upgrades support a growing 220 sites currently operated by Zellers, ... menu of pharmacist wellness and prevention we expect to open 100 to 150 Target stores HQ: Minneapolis initiatives in such areas as diabetes manage- throughout Canada in 2013 and 2014,” the ment, immunizations and smoking cessation. company reported. 2011 sales: $68.5 billion* target Target pharmacies also offer $4 generics, In January, Target revealed its healthcare % change vs. 2010: 4.1% free medicine flavoring and innovations like strategy for those stores. “Target intends No. of stores: 1,763* ClearRx, a revolutionary prescription bottle to operate pharmacies in as many stores in No. of stores with Rx: 1,612 that makes it easier for patients to identify Canada as possible,” the company reported Avg. store size: 110,000 sq. ft. their medicines, comply with the dosage regi- earlier this year. Tony Fisher, president of Rx sales: $3.4 billion men and avoid confusion. Last year, ClearRx the chain’s new Target Canada division, % of sales from Rx: 4.9% was named the Industrial Designers Society of called health-and-wellness services “an im- Sales per store: $38.9 million America’s Design of the Decade. portant part of our Canadian store strategy.” Among more recent offerings: a mobile op- Given the country’s regulatory framework * For fiscal 2011, ended Jan. 28 tion that lets customers refill prescriptions requiring pharmacist ownership of drug Source: Company reports, DSN estimates with any smartphone, day or night. Customers have embraced the service ini- tiatives. Target’s pharmacies have ranked highest in customer service among mass mer- chandisers for four straight years in a poll by J.D. Power and Associates. Target’s healthcare prowess also includes a growing network of 44 walk-in clinics in Tar- get stores in Florida, , and Minnesota. Those clinics, staffed by nurse practitioners or physician assistants, “provide medication and treatment guidelines based on evidence-based medicine,” according to the company. “Patients are seen on a first-come, first-served basis, and the average office vis- it lasts about 15 minutes,” Target reported. Charges generally run $75 for treatment of such minor illnesses as allergies, earaches, ear- ly-stage lyme disease and strep throat. On its Target Clinic website, the company reinforces its health message via a series of online edu- cational videos presented by chief medical officer Josh Riff.

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aaP levels playing fi eld HQ: Scottsdale, Ala. By JiM Frederick store pharmacies create pressure on indepen- 2011 sales: $3.92 billion dent pharmacy profi ts,” AAP’s central sup- % change vs. 2010: NA aaP Proving that the whole can be more than port team also has created two discount medi- No. of stores: 2,087 the sum of its parts, American Associated cine card programs for AAP affi liates. They No. of stores with Rx: 2,087 Pharmacies is adding new members in all 50 include Genericare, a value program the com- Avg. store size: 2,000 sq. ft. states and new programs to level the playing pany said is “particularly attractive to patients Rx sales: $3.5 billion fi eld between independent pharmacies and whose current insurance plans have high ge- % of sales from Rx: 90% national chains. neric co-payments, as well as to patients with- Sales per store: $1.9 million AAP has grown to 2,087 member-owned out insurance coverage at all,” and RxCare pharmacies generating nearly $4 billion in Select, a membership card offering discounts Source: Company reports, DSN estimates sales, marketing manager Louie Duran told on branded drugs. DSN. More importantly, the organization con- One mark of AAP’s growing infl uence is its tinues to develop support services and training early support and affi liation with RxAlly, an al- kits for its independent pharmacy members. liance of more than 20,000 pharmacies nation- Among them, the cooperative tells its mem- wide that seeks to improve patient outcomes bers, are “the tools and resources to participate through better drug adherence, improved clini- in medication therapy management and medi- cal pharmacy practices and coordination of care. cation adherence programs” that “not only “We are actively investing our time, resources provide compensation for addressing gaps in and talents in the development of RxAlly,” AAP care, but they also solidify your independent CEO Jon Copeland said. “This is a collabora- presence with local and national payers.” tive effort to better serve our members’ pa- Noting that “$4 prescriptions from chain tients and improve the delivery of health care.”

HQ: Hoffman Estates, Ill. 2011 sales: $15.3 billion new initiatives breathe life % change vs. 2010: -1.9% kmart No. of stores: 1,305* By alaric dearMent ber 2011, the company announced it would No. of stores with Rx: 944 provide seasonal fl u vaccinations at Kmart’s Avg. store size: 93,000 sq. ft. At one time, the name Sears was synony- more than 900 pharmacies, offering discounts Rx sales: $2.3 billion mous with retail, and the brand has become to members of Kmart Pharmacy’s Prescription % of sales from Rx: 15% an American icon. But the company has run Savings Club. into a lot of trouble lately. Posting a $3.1 bil- A month later, Kmart and Sears unveiled Sales per store: $11.7 million lion loss that even president and CEO Lou mobile walls that allow consumers to pur-

* U.S. Kmart stores only D’Ambrosio called “unacceptable” in a con- chase items like toys by scanning QR codes Source: Company reports, DSN estimates ference call with investors in February, Sears with their smartphones. The walls were Holdings, which operates the placed in movie theater lobbies, airports Kmart mass merchandise chain, and bus shelters in Chicago, Dallas, Denver has struggled in recent years. and Puerto Rico. Sears also unveiled a store- In January, the company an- within-a-store concept called Fitness Flag- nounced that it would close ship at more than 30 locations. The stores more than 100 underperforming feature expanded fi tness equipment layouts, Kmart and Sears stores, which it in addition to enhancements to the chain’s expected to generate up to $170 fi tness website. million in inventory sales. It later But one of the company’s biggest initiatives sold prescription fi les and inven- has been reaching out to minority communi- tory from 33 Kmart pharmacies ties. In August 2011, Kmart debuted “Madres in 16 states to Walgreens. y Comadres,” a series of eight Spanish-lan- Still, the company has started guage videos styled after telenovelas on You- a number of efforts to at- Tube. And in September 2011, Kmart launched tract new business. In Octo- the Latina Smart Fund.

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supervalu ‘plays to win’ HQ: Eden Prairie, Minn. By Michael Johnsen its synchronization with banner websites — a 2011 sales: $27.9 billion* suP family member can update a shopping list from % change vs. 2010: -3.5%*

Supervalu in the past year has continued to home while another is shopping. No. of stores: 2,434 er V place its emphasis on its “8 Plays to Win” strat- But at the foundation of the strategy is a “hy- No. of stores with Rx: 797 egy to better position the retailer for growth perlocal” retailing concept, where store directors Avg. store size: 60,000 sq. ft. alu in the years to come. Two of the eight plays are equipped with the tools and insights into their Rx sales: $2.2 billion include growth across its Save-A-Lot deep immediate trade areas to better meet the needs of % of sales from Rx: 8% discount format and its wholesale distribution the communities they serve. Local operators are business. Also implemented at the headquarter helping to define the assortment, pricing, promo- Sales per store: $11.5 million

level, Supervalu has been looking to simplify tions and services to the neighborhood. * Excludes supply chain sales; in-store systems and protocols and fund proj- In addition to facilitating a local product as- sales represent fiscal year 2012, ended Feb. 25 Source: Company reports, DSN estimates ects in advance of price investment. sortment, Supervalu also has worked on lower- The remaining four strategies are all in-store ing its price profile. In September 2011, Supervalu applications to improve the shopping experi- introduced its “Fresh Produce, Fresh Prices” ini- ence and drive loyalty: provide competitive tiative, which effectively lowered the everyday value, deliver on a promise of “fresh,” match price on around 200 key produce items. competitive pricing and offer “hassle-free” The marketing of this new shopping expe- shopping experiences. rience has been placed in the hands of former To help improve on the “hassle-free” shop- P&G veteran Michael Moore, who joined the ping experience, Supervalu earlier this year grocer as EVP and chief marketing officer in launched a custom-built mobile application de- January. Moore will lead all of the company’s signed to give customers the tools they need to marketing activities, including overseeing be efficient while shopping at its stores. One of customer and brand strategy, advertising, the unique features associated with the app is customer loyalty, and research and analytics.

HQ: Amsterdam 2011 sales: $25.1 billion* making waves in wellness % change vs. 2010: 6.8% aHolD By alaric dearMent that allow commuters to scan bar codes with No. of stores: 756 smartphones and then have the products they No. of stores with Rx: 565 Stop & Shop — and the other banners in the buy delivered to them. Avg. store size: 55,000 sq. ft. United States owned by Netherlands-based Beyond technology, Ahold stores have Rx sales: $2 billion Royal Ahold — has remained strong. Ahold made headway in health and wellness. In % of sales from Rx: 8% USA, the company’s American subsidiary, May, Giant-Carlisle sponsored its first Child- Sales per store: $33.2 million operates Stop & Shop, Giant-Landover and hood Obesity Summit in Willow Grove, Pa., Giant-Carlisle chains, as well as the Peapod which brought in local experts like physicians * U.S. stores only; includes entire Ahold USA division online grocery business. Despite its relatively and the store’s own in-store nutritionists. A Source: Company reports limited geographic area, the company has similar summit followed in August in Har- made waves in recent years with its multitude risburg, Pa., while Martin’s Food Markets, a of programs in the health-and-wellness space banner under Giant-Carlisle, sponsored one and beyond. in January 2012. Giant-Carlisle also has spon- In March 2012, Stop & Shop made Fast sored several drug take-back events, working Company magazine’s list of the top 10 most with the Drug Enforcement Administration innovative companies in the food industry, a and law enforcement officials. ranking that placed it alongside Starbucks and The company also has seen significant -ex Chipotle, for its Scan It! mobile application. In- pansion. In January, Giant-Carlisle announced troduced in June 2011, the app allows custom- the purchase of 16 Genuardi’s stores in the ers to use their mobile device to scan, tally and area from Safeway. And in Feb- receive personal savings while they shop. ruary, Giant-Landover announced that it In February, Peapod installed posters would take over two Fresh & Green’s stores, in at train stations in the Philadelphia area and Parkville, Md.

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new era dawns at HQ: Issaquah, Wash. By alaric dearMent ecutive told Drug Store News. Based in Corona, 2011 sales: $64.9 billion* Calif., the mail-order center delivers medica- % change vs. 2010: 8.9% CostCo One era ended and a new one began at the tions to patients. No. of stores: 429 beginning of this year as Costco Wholesale This month, the company also is launching No. of stores with Rx: 421 co-founder Jim Sinegal retired as CEO, with a veterinary supplies and products initiative Avg. store size: 142,000 sq. ft. Craig Jelinek moving up from his position of at all its stores, including a full range of pre- Rx sales: $1.54 billion COO to replace him. scription pet medications. % of sales from Rx: 2.3% Throughout the past year, the club chain Costco has seen new initiatives beyond also has come up with some new programs the healthcare space as well. In May 2011, the Sales per store: $151.3 million

and expanded existing ones in pharmacy and maker of Lily.B natural skin care products * U.S. stores only in other areas. signed a deal with Costco whereby the retailer Source: Company reports The retailer spent much of 2011 expanding would carry the brand’s Multi- its immunization program and delivered an action Rescue Ultra eye cream at estimated 200,000 immunizations throughout a special low price, initially for a the year. Originally, Costco performed immu- limited pilot program at 20 Cost- nizations through a third-party company, but co stores in eight states. In No- it gradually has been training its pharmacists vember 2011, Lily.B announced a to deliver immunizations. At press time, the second pilot launch. company had at least one immunizing phar- And last year, Costco led a macist in all of its pharmacies and planned to voter initiative to scrap Wash- train the remaining pharmacists as well. ington restrictive liquor control Costco’s specialty pharmacy business also laws and privatize the sale of saw growth, doubling its sales, a company ex- liquor in the state.

HQ: Lakeland, Fla. reinvestments pay off 2011 sales: $27 billion* By Mike troy % change vs. 2010: 7.3% Publix lion the prior year. The 2011 figure was aided by inclusion of a 53rd week in the company’s No. of stores: 1,046 Publix Supermarkets didn’t become one fiscal year, but even on a comparable-store No. of stores with Rx: 864 of the nation’s leading food retailers through basis, sales increased a very respectable 4.1%. Avg. store size: 46,500 sq. ft. gimmicks or unsustainable spurts of aggres- In addition to the emphasis on store ex- Rx sales: $1.6 billion sive growth. Instead it just keeps operating perience and high service levels, Publix con- % of sales from Rx: 6% clean, well-merchandised stores where shop- tinually reinvests in its stores. Last year, the Sales per store: $25.8 million pers are more than willing to pay modestly company opened 29 stores, of which 11 were premium prices interspersed with discount- replacement stores, and it remodeled an- * Includes 53rd week Source: Company reports, DSN estimates ed feature items in exchange for a superior other 126 units, roughly 12% of its year-end store experience. store base. That formula was nearly identical Publix still offers carryout service, and to 2010 when the company opened 41 new employees who push carts out to custom- stores, of which 21 stores were replacements, ers’ cars are trained to politely decline and 115 stores were remodeled. This year tips. The service philosophy extends to looks very similar to the last two, with 30 new the pharmacy area as well, where Publix stores and an undisclosed number of remod- is no laggard when it comes to innova- eling projects funded by a $730 million capital tive offerings. Pharmacists often are better budget, compared with $603 million last year. able to interact with shoppers than their Despite the new store growth, Publix re- counterparts at more hectic mass market mains heavily concentrated in Florida where or chain drug stores. 743 of its stores are located. Georgia is a dis- It is an effective combination that en- tant second with 179 stores, followed by Ala- abled Publix to increase sales last year bama with 49, with 45 and by 7.3% to $26.9 billion from $25.1 bil- Tennessee with 30.

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emerging force in health HQ: Bentonville, Ark. sam’s Club By Mike troy solutions. On the awareness front, Sam’s earli- 2011 sales: $53.8 billion er this year launched a new publication called % change vs. 2010: 8.8% Accelerating momentum has characterized Healthy Living Made Simple with a circulation of No. of stores: 611 the performance of Sam’s Club for the past 8 million. From a prevention standpoint, Sam’s No. of stores with Rx: 540 two years, and health-and-wellness categories Club has conducted numerous health screen- Avg. store size: 133,000 sq. ft. have played a key role. Coming off its seventh ings in clubs. Strategies related to solutions in- Rx sales: $1.45 billion consecutive quarter of accelerating same-store volved the presentation of merchandise in an % of sales from Rx: 2.7% growth, with a 5.4% increase in the fourth quar- integrated way to build transaction size. ter, Sam’s ended the year with sales of $53.8 bil- Health-and-wellness strategies unfolding Sales per store: $88 million

lion that were 8.8% higher than the prior year. at Sam’s Club this year are taking place amid Source: Company reports, DSN estimates A key contributor to the improved per- plans to accelerate square footage expansion formance in recent years is the result of a under the leadership of new CEO Rosalind heightened focus around health-and-wellness Brewer. The company lost president and CEO businesses that include pharmacy, over-the- Brian Cornell earlier this year when he left to counter medications, optical services and in- join PepsiCo; however, his departure allowed store hearing aid centers. These businesses the company to promote one of the U.S. stores accounted for roughly 5% of Sam’s total sales division’s top operations executives in Brewer. last year, with pharmacies now in 540 clubs, In the process, she became the first female divi- optical departments in 500 clubs and hearing sional CEO in the 50-year history of Wal-Mart centers in 120 clubs. Stores. This year, Brewer will oversee Sam’s Going forward, Sam’s Club is well posi- Club’s most aggressive growth in nearly a tioned to maintain its same-store sales growth decade as the club division expects to open by pressing harder on health-and-wellness ini- between 10 and 15 new clubs, with nine of tiatives that drive awareness, prevention and those expected to be new units.

HQ: Dublin, Ohio meDiC i 2011 sales: $1.29 billion nternational msi caters to patients % change vs. 2010: -2.27% By alaric dearMent ine sH o provements.” No. of stores: 622 Fiacco emphasized the role of MTM as part No. of stores with Rx: 622 One of the things that sets Medicine Shoppe of MSI’s business model. “Patient service has Avg. store size: 1,800 sq. ft. International and Medicap Pharmacy apart always been a cornerstone of Medicine Shoppe Rx sales: $1.22 billion PP e from chains is the fact that they operate accord- and Medicap Pharmacies,” Fiacco said. “Our % of sales from Rx: 95% ing to a franchise system, with franchisees own- franchisees have set themselves apart from the Sales per store: $2.07 million ing their stores while operating them under the competition by delivering personalized, patient- Medicine Shoppe brand. focused services, which is why [MTM] aligns Source: DSN estimates But in recent years, MSI, owned by Cardinal very well with the core strengths of Medicine Health, has created a number of programs and Shoppe and Medicap Pharmacy pharmacists.” initiatives in which it allows franchisees to par- Franchisees also have taken advantage of ticipate, such as Specialized Care Centers that al- pharmacist-administered vaccinations. This low stores to cater to patient needs like diabetes. started with a 2009 program sponsored by Car- Lately, the company has offered additional dinal Health that created a Specialized Care Cen- services as well, such as medication therapy ter for immunizations. Since then, more than 300 management, which VP John Fiacco cited as a MSI and Medicap Pharmacies across the United reason why MSI earned high customer satis- States have participated in the program. faction ratings in Consumer Reports magazine “Vaccinations [are] a great way to expand in May 2011. “MTM is about patient care,” Fi- a pharmacy’s healthcare footprint in the lo- acco said. “Statistics are showing that MTM cal community, drive store traffic and expand is improving patient outcomes and reducing revenue streams, all of which can help bolster overall healthcare costs, and we’re proud to overall profitability and strengthen patient loy- continue to play a role in those types of im- alty,” Fiacco said.

16 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

H-e-b connects locally HQ: San Antonio By Michael Johnsen glucose and cholesterol every second Saturday 2011 sales: $16.5 billion of the month from March through October. % change vs. 2010: 3.3% H-e-b There’s nothing like realizing -big In February, H-E-B stood out against its No. of stores: 330 savings through the hometown supermarket. competition, and stood for better heart health, No. of stores with Rx: 210 The values are out-of-this-world good, or at when more than 25,000 Texans broke out into Avg. store size: 65,000 sq. ft. least that’s how H.E. Butt Grocery Co.’s 2012 an impromptu four-minute dance break in Rx sales: $1.2 billion Super Bowl ad, shown across several Texas support of American Heart Month. % of sales from Rx: 7.4% markets, positioned H-E-B. The dance break was in conjunction with But snappy advertising is not the only way the company’s “Healthy at H-E-B” initiative, Sales per store: $50.1 million

H-E-B connects with its consumers. The retail- a comprehensive, long-term commitment to Source: DSN estimates er has expanded its “Mi Tiendo” Hispanic for- improve the health of Texans and provide mat into the Austin market to help differentiate them with fresh, healthy food that is afford- itself in a heavily populated Hispanic market. able and easy to prepare. “Healthy at H-E-B” So far the concept has been available in two includes special offers on healthy food, fitness locations in the Houston market. groups, events and competitions organized The remodel incorporated 6,000 sq. ft. of around the three critical pillars of health: selling space with Hispanic-centric grocery food, body and life. fare, including a masa factory that grinds corn “Texas is facing a health crisis,” said daily, a tortillas-producing machine and a H-E-B president Craig Boyan. “The prevalence butcher and deli featuring Hispanic cuisine. of obese and overweight adults has doubled in And across its pharmacy base, H-E-B has the last two decades. H-E-B wants to reverse been highlighting the capabilities of its pharma- this trend and help millions of Texans cists with health screenings for blood pressure, adopt and stick to a healthy lifestyle.”

HQ: giant eagle electrifying offerings 2011 sales: $9.3 billion Giant Eagle’s long-term business vision- The app also includes a shopping list % change vs. 2010: 8.1% ary Laura Shapira Karet assumed the reins function where shoppers can add items to No. of stores: 229 of the innovative regional grocer this Janu- the list from their shopping history, scan an No. of stores with Rx: 213 ary, succeeding her father David Shapira, item bar code or add ingredients from a li- Avg. store size: 80,000 sq. ft. who has been Giant Eagle CEO since 1980 brary of thousands of recipes. And the app Rx sales: $1.2 billion when the supermarket had 52 stores. keeps track of a customer’s Fuelperks! tally, % of sales from Rx: 13% Now the Steeltown grocer boasts 229 lo- including when they expire. Sales per store: $40.6 million cations, the most recent being its fifth Mar- In November 2011, Giant Eagle opened ket District location in five years — and its three customer-accessible electric vehicle Source: DSN estimates first in Pittsburgh’s North Hills suburbs. charging stations in the Pittsburgh area. Giant Eagle’s Market District is a gourmet The stations are the first in the Pittsburgh concept targeting food enthusiasts area made available completely free of cost with teams of chefs and other culi- by a retailer. nary professionals. The EV charging stations were Giant Giant Eagle late last year segued Eagle’s second alternative energy offering its loyalty shoppers into the mobile in 2011. Last July, the multiformat retailer phone and tablet arena with an app introduced the first publicly accessible for users of Android devices. The app compressed natural gas fueling station in enables shoppers to peruse the week- the area at its retail support and distribu- ly ad circular on their mobile phones tion center in Crafton, Pa., along with 10 or computers. And the grocer’s new CNG fleet vehicles that are expected to eOffers — digital coupons — can be lessen Giant Eagle’s consumption of diesel added to the customer’s Giant fuel by as much as 100,000 gallons in the Eagle Advantage Card. first year of operation.

17 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

Food, rx blend at Hy-Vee HQ: West Des Moines, 2011 sales: $7.3 billion By alaric dearMent to the Gallup-Healthways Well-Being Index. % change vs. 2010: 5.8% Hy-Vee A month before, the company started No. of stores: 235 One of the biggest advantages that super- bringing trained chefs into stores to encourage markets have is their specialization in food customers to cook healthy food at home and No. of stores with Rx: 236* and their ability to have pharmacies — one oversee food displays, in addition to demon- Avg. store size: 70,000 sq. ft. that stands out in this area is Hy-Vee. strating ways to prepare food, teaching classes Rx sales: $950 million When chairman and CEO Ric Jurgens and showcasing new types of produce. % of sales from Rx: 13% retires in June — with Jurgens’ recom- And in September 2011, Wellmark Blue Sales per store: $31 million mendation that president and COO Randy Cross and Blue Shield named Hy-Vee Phar- * Includes stores that operate Edeker take his place — he will leave a com- macy Solutions — the chain’s specialty phar- satellite or clinic pharmacies pany that has made its mark as a leader in macy division that it operates with Amber Source: Company reports health-and-wellness initiatives for the mar- Pharmacy — as its preferred provid- kets in which it operates. er of specialty pharmacy benefits for In August 2011, Jurgens was named co- members with disease states requir- chairman — alongside Wellmark Blue Cross ing complex drug regimens, such as and Blue Shield CEO John Forsyth and Iowa cancer, hepatitis, multiple sclerosis Sports Foundation chairman Doug Reichardt and Crohn’s disease. — of the Healthiest State Initiative, a program Beyond health and wellness, sponsored by private businesses whose goal the chain also has introduced mo- is to make Hy-Vee’s home state of Iowa the bile apps. In January, it released an healthiest state by 2016. The program encour- app that allows customers to locate ages individuals, businesses, organizations products, browse ads, search for rec- and communities to work together in improv- ipes, build shopping lists, shop ing Iowa residents’ health and well-being — and interact with the company the state ranks 19th in the country, according via social media.

HQ: Boise, Idaho albertsons grocer targets diabetes 2011 sales: $3.9 billion By antoinette alexander continues to offer meter training and diabetes % change vs. 2010: -2.6% management classes in most major markets. No. of stores: 205 Grocer Albertsons continues its focus on Last year, Albertsons announced that it No. of stores with Rx: 194 health and wellness with its offerings in diabe- was joining the Diabetes Prevention and Con- Avg. store size: 57,000 sq. ft. tes care and immunizations. The retailer also has trol Alliance, giving its shoppers access to the Rx sales: $415 million named a new VP pharmacy operations. alliance’s community-based programs to help % of sales from Rx: 11% Assuming the role is Stewart Edington, who prevent and control diabetes. The Diabetes Pre- Sales per store: $19 million has been with Albertsons since 2003, when he vention and Control Alliance was launched in was hired as a pharmacy manager and worked 2010 by UnitedHealth Group and a select group Source: DSN estimates in the company’s Phoenix stores. In 2006, Eding- of national organizations who are committed to ton joined Albertson’s LLC as the division delivering community-based diabetes preven- pharmacy manager for the company’s Flori- tion and control programs. da stores, a position he has held for the last The alliance’s Diabetes Control Program five years. Prior to joining Albertsons, Eding- provides patient education and support from ton gained pharmacy operations experience trained pharmacists to help people with diabetes in his native South Africa in establishing and better control their condition and reduce the risk running four independent pharmacies over of developing such complications as cardiovas- a seven-year period, and also was a health cular, kidney and eye disease. In-store pharma- clinic manager for two years at a rural clinic. cists in select Albertsons locations conduct blood Meanwhile, the company continues its fo- glucose, cholesterol and blood pressure testing cus on health and wellness in stores. For services for program participants and provide those patients with diabetes, the grocer them with on-the-spot results.

18 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

Pharmacy key for Fred’s HQ: Memphis, Tenn. By Michael Johnsen ating profit and customer service metrics,” 2011 sales: $1.9 billion

Efird said. “Pharmacy expansion not only % change vs. 2010: 2% FreD’s Pharmacy continues to be a key point of enhances margin, it also serves as a proven No. of stores: 700 differentiation for Fred’s versus other small- driver of customer trips and loyalty,” he said. No. of stores with Rx: 325 box discounters. Fred’s is coming out of fis- In addition to growing its prescription base, Avg. store size: 18,300 sq. ft. cal 2011 having completed its most aggressive Fred’s also is focused on expanding its clini- Rx sales: $655.8 million pharmacy acquisition pace to date and has no cal outreach with Fred’s pharmacists admin- % of sales from Rx: 34.9% plans on slowing down in 2012. istering 35% more immunizations in fiscal The reasoning is simple. Even with contin- 2011 versus fiscal 2010. Fred’s is planning to Sales per store: $2.7 million

ued pressure on pharmacy reimbursements open as many as 28 new pharmacies through Source: Company reports and a rather large generic wave — more fiscal 2012. than 20% of the branded pharmaceuticals Another key initiative continues to be sold through Fred’s will convert to generic Fred’s Core 5 program, which is a store in 2012 — stores with pharmacies generate format featured across almost 60% of the on average 10% better store sales results than company’s store base today — bringing the stores without pharmacies. Those pressures two-year total of upgrades to more than will drive Fred’s pharmacy comparable sales 400 stores. The Core 5 program is designed down between 1% to 4% through fiscal 2012 to highlight five strong trip-driving depart- (excluding a 53rd week), but it’s still worth it, ments where Fred’s feels it has a market- said Fred’s CEO Bruce Efird. able advantage over other small-box com- “Despite pressures on third-party reim- petitors — notably pharmacy, celebration bursements, the [fiscal 2011] results exceeded and party, pet products, paper and goals in scripts growth, unit growth, oper- chemical and home products.

HQ: Governeur, N.Y. kinney Drug 2011 sales: $810.2 million kinney’s hometown charm % change vs. 2010: 2.8% By antoinette alexander mated refill program that is married with No. of stores: 91 outbound messaging for patient reminders No. of stores with Rx: 91 Kinney Drugs serves the small rural com- and free prescription delivery for those pa- Avg. store size: 10,500 sq. ft. munities of central and northern New York tients with little or no mobility. Rx sales: $616 million and Vermont, and with roots that date back to Meanwhile, Kinney Drugs has made some % of sales from Rx: 76% 1903, this regional chain has a tight grasp on recent changes to its management team. In Sales per store: $5.5 million the tucked-away communities that it serves. August 2011, the chain announced the pro- With such pharmacy services as its Kinney- motion of 30-year company veteran Owen Source: Company reports Care Discount Prescription Plan, Ready- Halloran to SVP pharmacy procurement. Scripts and free prescription As SVP pharmacy procurement, Halloran delivery, the retail pharmacy is responsible for overseeing all pharmaceuti- strives to maintain its “home- cal purchasing for Kinney Drugs retail, mail- town” pharmacy charm. order and institutional pharmacy. The KinneyCare Discount More recently, the company announced Prescription Plan is open to the hiring of Jennifer Whalen as director of both the uninsured and un- marketing and Steve Harris to the new posi- derinsured pharmacy patients. tion of inventory and replenishment man- With more than 350 generic ager. Cheri Taylor, category division man- prescriptions available, the ager of Kinney Drugs, has been promoted KinneyCare Discount Prescrip- to the new position of director of retail tion Plan offers a 90-day supply merchandising. Marc Baum, merchandise of prescriptions for $11.99. It presentation supervisor of Kinney Drugs, costs $10 a year to enroll. has been promoted to category manager in ReadyScripts is an auto- general merchandise.

19 • April 2012 DrugStoreNewS.com TOP 50 SCORERS merger expands plans HQ: Green Bay, Wis. By alaric dearMent complementary strengths, store networks and 2011 sales: $3 billion sHoP ko consumer-centric retail models,” Shopko chair- % change vs. 2010: 49% When the term “mass merchandiser” is man, president and CEO W. Paul Jones said at No. of stores: 340* uttered, usually several big names that start the time the deal was announced. “The Shopko No. of stores with Rx: 307 with “K” or “W” come to mind. But one of the Hometown store format, featuring our unique Avg. store size: 80,000 sq. ft. fastest-expanding mass merchandise retailers merchandising strategy and improved store de- Rx sales: $870 million in the past year is one of the smallest. sign, is an ideal fit for the smaller communities % of sales from Rx: 29% In January, Green Bay, Wis.-based Shopko that Pamida serves with its exceptional service announced that it would merge with Omaha, and community-minded approach.” Sales per store: $8.8 million

Neb.-based mass merchandiser Pamida. The Shortly after the Pamida merger, Shopko * Includes addition of 191 Pamida stores combined $3 billion company will operate announced the launch of a pharmacy app for (158 with pharmacies) Source: Company reports, DSN estimates nearly 350 stores in 22 states — mostly in small- BlackBerry, Android and iPhone devices that er and rural communities — with plans to add will allow customers to request refills, review more stores starting in the second half of this prescription details, set up dosage reminders year. The company will bring together a vast and receive email and text notifications when array of store formats, including full-line Shop- a refill is ready. ko stores, Shopko Express, Shopko Hometown, “We are always exploring new ways to im- full-line Pamida stores and Pamida pharma- prove customer service and make our phar- cies. The Pamida stores will be converted to the macy services more convenient, and this app smaller Shopko Hometown format, whose size makes finding our stores and filling prescrip- ranges from 15,000 sq. ft. to 35,000 sq. ft. Both tions on their mobile devices quick and easy chains are owned by affiliates of Boca Raton, for our customers,” Jones said. “This app is Fla.-based Sun Capital Partners. a direct response to consumer demand, and “Merging Pamida and Shopko is a great move we’ve worked hard to develop the features for our businesses and our customers given our most important to our customers.”

HQ: Keasbey, N.J.

2011 sales: $12.8 billion sHoPrite spotlight on nutrition % change vs. 2010: 8.5% By antoinette alexander ShopRite stores in New Jersey, New York, No. of stores: 240 Maryland and Connecticut. This service of- No. of stores with Rx: 199 ShopRite is, no doubt, taking a holistic fers customers the opportunity to discuss Avg. store size: 65,000 sq. ft. approach to health and wellness through its their health and dietary needs with a nutrition Rx sales: $640 million pharmacy services, retail dietitian program, professional. The consultation with a retail di- % of sales from Rx: 5% and in-store and online initiatives. etitian can cover a number of issues, includ- Sales per store: $53.3 million At the pharmacy, patients can take advan- ing how to shop for healthy meals and proper tage of such programs as 30-day/90-day gener- nutrition for specific medical conditions. Source: Company reports, DSN estimates ics — $3.99 and $9.99, respectively — a free 14- Dietitians also can work with customers to day supply of popular generic antibiotics and schedule monthly health screenings for such a free 30-day supply of seven popular generic conditions as diabetes or high cholesterol. diabetic medications. Most of its pharmacy Retail dietitians are available to walk the aisles locations offer flu vaccinations and additional with customers — a personal touch that the gro- vaccinations, such as medications for travel and cer believes makes a difference with its shoppers. preventive care, also are available. In the store, shoppers also will find shelf Online pharmacy patients can refill prescrip- tags (e.g., gluten-free, organic, natural and tions, as well as check drug allergies and interac- low sodium) to help them navigate the aisle tions and print their medical expense summaries. and make healthier choices. Shoppers also As previously reported by Drug Store can take advantage of the “Ask the Dietician” News, Wakefern implemented the retail di- feature on the company’s website and access etitian program in 2006. There currently additional information on specific dietary re- are 30 ShopRite retail dietitians who serve strictions and/or health conditions.

20 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

a&P touts holistic focus HQ: Montvale, N.J. By antoinette alexander partnership with several vendors. The new shelf 2011 sales: $8.1 billion tag system, which launched in January, centers % change vs. 2010: 1% Fresh from its emergence from bankruptcy on those core conditions mentioned above and No. of stores: 320 a&P in March, grocer A&P is embarking on a new helps shoppers make healthier choices at the No. of stores with Rx: 189 chapter and positioning itself to better compete shelf. The tags also feature a QR code that serves Avg. store size: 42,000 sq. ft. against chain drug through a more holistic ap- as a bridge to the grocer’s Live Better Wellness Rx sales: $486 million proach to health and wellness. website, where consumers can access additional % of sales from Rx: 6% To help its shoppers live healthier lives, the information via their smartphones. supermarket pharmacy, which now operates The grocer also now has 550 pharmacists who Sales per store: $25.2 million

as a private company, is taking a more holistic are trained and certified to immunize. To further Source: DSN estimates approach that spans across the entire store and differentiate from its rivals, A&P is focusing on further leverages its pharmacy. such vaccines as shingles, as well possibly trav- “That positions us a lot better against compe- el vaccines and those that may be less readily tition, and particularly chain drug, because we available in the marketplace. “We also believe, have the whole rest of the store to leverage, es- especially as it relates to treating hypertension pecially when we focus on some core conditions and diabetes, that leveraging the MTM model [such as cardiovascular disease, diabetes and obe- along with the services of a clinical dietitian can sity],” said Jeff Maltese, VP health and wellness. be a very impactful program,” Maltese said. “Those conditions have implications in nutrition, In addition, the company is looking to better as well as pharmacy, to their treatment. They also reflect the culture and preferences of local cus- have a very high household penetration, so they tomers through its “store of the neighborhood” affect a lot of our customers’ buying habits.” concept. “We are actually looking at data ... of This surround-sound approach to providing what’s actually selling in that market to make health solutions has given way to such in-store sure it is represented in those planograms,” initiatives as a new shelf tag system developed in Maltese said.

HQ: Grand Rapids, Mich. 2011 sales: $14.6 billion innovation in the midwest meijer % change vs. 2010: 2.6% By alaric dearMent give prescription prenatal vitamins to expect- No. of stores: 197 ant mothers, reached a milestone in June 2011 No. of stores with Rx: 197 Though small in store count and geographic by filling its 1 millionth prescription. The Avg. store size: 205,000 sq. ft. reach compared with its competitors, privately company said the program, launched in 2008, Rx sales: $438.9 million owned regional mass merchandise chain Meijer had resulted in savings of almost $14 million % of sales from Rx: 3% has shown that when it comes to innovation, for Midwest families. Sales per store: $74.3 million size is only a detail. The chain has launched a number of pro- In November 2011, the company announced grams beyond the healthcare space as well. In Source: DSN estimates a chainwide program to turn its more than 200 April 2011, Meijer began allowing online shop- pharmacists into diabetes experts, with the goal pers to order items and have them shipped to of placing one diabetes care pharmacist in all a local store at no cost, calling the program of the stores in the five-state Midwest area that Order-to-Store. Customers can designate any Meijer serves. At the time, a survey conducted Meijer store as a pickup location and receive by the company found that 60% of respondents email notifications when the items arrive. said they would know what lifestyle changes to And in August 2011, the company an- make if they received a diabetes diagnosis, but nounced the opening of a smaller-format gro- 50% of those with diabetes had not substantial- cery store in the Chicago area. The 90,000-sq.-ft. ly altered their diets or increased aerobic activ- Meijer Marketplace in the suburb of Melrose ity. The initiative followed one launched in 2010 Park, Ill., features a full-service pharmacy and that made the generic diabetes drug metformin national and private-label products, as well as available to patients free of charge. such merchandise as electronics, toys, home Another free prescription program, to products and pet products.

21 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

new company, same values HQ: Jacksonville, Fla. Winn-Dixie/bi-lo By Michael Johnsen There are a lot of similarities between the 2011 sales: $9.7 billion two chains: Both have come out of bankruptcy % change vs. 2010: 5.5%* As of March 12, Bi-Lo and Winn-Dixie com- over the past decade — Winn-Dixie in 2006 No. of stores: 688 bined operations to form a formidable South- and Bi-Lo more recently in 2010 — during No. of stores with Rx: 493 eastern supermarket force with 493 pharma- which many of their underperforming opera- Avg. store size: 46,500 sq. ft. cies and more than $780 million in pharmacy tions already had been shuttered; both chains Rx sales: $784 million revenue, according to DSN projections. Bi-Lo employ loyalty cards that utilize the Fu- % of sales from Rx: 8.1% will be relocating its headquarter operations elperks! fuel award program; and both chains to Jacksonville, Fla., in what might be called in the past year have been targeting growth Sales per store: $14.1 million

a homecoming — in 1961, Bi-Lo was founded in spite of the challenging economic recession * Winn-Dixie’s fiscal 2010 was a 53-week period by Frank Outlaw, a former Winn-Dixie execu- recovery with extensive remodel plans. Source: DSN estimates tive. Today, Randall Onstead, chairman of Bi- Winn-Dixie’s transformational re- Lo, has been named the CEO and president of models generate between $400 and $500 the combined company. in sales per sq. ft. versus around $300 The only overlapping state in which both in sales per sq. ft. in a traditional Winn- banners operate is Georgia. In addition to the Dixie. Before the proposed merger, Winn- Peach State, Bi-Lo supermarkets operate in Dixie had planned to institute its trans- , South Carolina and Tennes- formational format across 60% of its store see. Winn-Dixie’s footprint extends south and base, or 290 stores, and former Winn- west across Florida, , and Dixie chairman, president and CEO Peter Louisiana. No store closures are planned be- Lynch, who stepped down from the com- cause of overlapping markets, and each will pany in January, had suggested those continue to operate under its separate banner. plans should not change.

HQ: Scarborough, Maine HannaForD 2011 sales: $4.6 billion grocer’s focus stays local % change vs. 2010: 4.5% By antoinette alexander and vegetables. In 2011, according to Delhaize No. of stores: 179 Group’s most recent annual report, Hannaford No. of stores with Rx: 138 What started as a one-horse cart operation significantly expanded its “Close to Home” as- Avg. store size: 34,000 sq. ft. back in 1883 has since evolved and expanded sortment, including more local fruits, vegeta- Rx sales: $414 million into what is known today as Hannaford Su- bles, meat and seafood, as well as more locally % of sales from Rx: 9% permarkets. However, nearly 130 years later, made products. Hannaford also developed a Sales per store: $26 million at Hannaford it still is about convenience and more consistent and streamlined on-boarding locally sourced products. process for local vendors. Source: DSN estimates The company’s strong commitment to Meanwhile, the retailer recently launched health and wellness and its innovative initia- a new click-and-collect service, dubbed Han- tives have helped set this regional grocer apart naford To Go. The drive-through grocery service from its competition. For example, Hannaford enables shoppers to order groceries online and implemented in 2006 its Guiding Stars star-rat- pick up the items at the store in their car. The ing system, the first storewide nutrition navi- test launched at the Dover, N.H., store in March gation system in the United States. The grocer, 2011, and has since expanded to the chain’s which is owned by Belgium-based Delhaize North Windham store in Maine, according to lo- Group, also offers free nutrition classes across cal news reports. The service is free for the first New England. However, it doesn’t stop there. order and for any subsequent order that is more Sustainability is one of ’s than $125. Otherwise, there’s a $5 service charge. three strategic pillars, and in light of this, in A company spokesman said that the cus- 2011 it took steps to place a greater emphasis tomer response is being evaluated to “see if it on local goods. Hannaford developed a “Close makes sense for other locations.” However, in to Home” shelf and promotional program to Delhaize’s annual report, it did note that the highlight its offering of locally sourced fruits concept results are “exceeding expectations.”

22 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

High-tech hometown touch HQ: Pine Bluff, Ark.

By JiM Frederick not only to the chain’s own USA Drug, Super 2011 sales: $660 million usa Drug D, May’s, Drug Warehouse and Med-X Drugs % change vs. 2010: 1.5% It takes competitive moxie and grit to go up stores, but to “thousands of retail stores around No. of stores: 145 against the world’s most powerful mass mer- the country,” according to a company report. No. of stores with Rx: 145 chant in its home state and thrive. USA Drug, Among the chain’s latest preventive health Avg. store size: 6,000 sq. ft. the Little Rock, Ark.-based David to Walmart’s offerings is an easy-to-use, self-administered Rx sales: $409 million Goliath, does it with a deft blend of hometown- test for early-stage colorectal cancer, available % of sales from Rx: 62% style, roots-driven personal service, accessible at 31 USA Drug stores, as well as seven Super health-and-wellness care at its pharmacies, D stores and 32 of the company’s Drug Ware- Sales per store: $4.5 million

online and in-store shopping conveniences, so- house, Med-X Drug and May’s drug stores. Source: DSN estimates phisticated information technology and logisti- The chain also has trained its pharmacists to cal distribution prowess. provide immunizations and now offers flu Together, those strengths make USA Drug a shots at all of its roughly 150 pharmacies. formidable drug store presence in , Mis- Other recent programs include new online souri, Mississippi, , Kansas and Ten- digital photofinishing capabilities and a new nessee. “USA Drug pharmacies were designed smartphone application allowing customers to handle large numbers of customers while pro- to refill their scripts at any USA Drug store by viding a down-home, friendly atmosphere” with ordering through their iPhones. “Pharmacies a “continuously evolving retail format ... at the also have an online interface that offers even lowest prices,” the company reported. more features than the app,” USA Drug tells The company also produces and distributes customers. “Refill requests submitted using the its own line of more than 650 private-label prod- USA Drug app or through the pharmacy’s ucts under the Select Brand label. That low- Internet refill portal appear directly on your priced line of alternative products is shipped pharmacist’s screen.”

HQ: Raleigh, N.C. 2011 sales: $578 million* kerr Drug Clinical efforts expand % change vs. 2010: 1.4% Kerr Drug forged a groundbreaking retail Added Eliezer, “We have moved most of the No. of stores: 76 health model over the past decade with constant- former clinical pharmacists back into the stores, No. of stores with Rx: 76 ly evolving Care Center concepts in a dozen loca- but they spend a portion of their time training Avg. store size: 8,400 sq. ft. tions. Now, the company is spreading its health others to perform much more clinical inter- Rx sales: $390 million* service innovations across its store network. ventions, diabetes education, immunizations, % of sales from Rx: 68% Going forward, all units will benefit from the MTM, [and] explaining how some meds or dis- Sales per store: $6.6 million chain’s unflinching culture of experimentation ease states deplete needed nutrients. The expec- in retail health services — and from its history of tation is that the pharmacist will now get out to * Including employer-based clinical services, specialty and institutional pharmacy sales, etc. participation in money-saving integrated-care the front of the pharmacy more, even leaving Source: DSN estimates programs like the Asheville Project, ChecKmeds the pharmacy to go with the patient to explain NC, North Carolina Medicaid’s generic substi- some product.” tution program and the Chain Drug Consor- “We haven’t abandoned the clinical effort,” tium’s RxAlly medication adherence program. Eliezer told DSN. “In truth, we have expanded “The Care Centers have been our launching it from a ‘laboratory’ in a few stores to an all- point for clinical services, and we were able to store, everyday process of creating a healthy develop some very talented folks,” explained relationship between the patient and the RPh.” Mark Gregory, VP pharmacy and government To that end, Kerr’s pharmacists also will of- relations. “We have redeployed most of those fer a full personal medication review, free of assets to build a clinical care center model in all charge, to any customer who asks. The consul- of our pharmacies, because we recognize that ... tation will cover the patient’s potential interac- every Kerr Drug pharmacist needs to be offering tions and side effects, correct dosage regimen the core menu of clinical services that we were and possible ways to save money through ge- just doing in the Care Centers in the past.” neric switches or other changes.

23 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

remodeling for wellness HQ: Tyler, Texas brooksHire 2011 sales: $2.1 billion By aManda Baltazar a little bit more in control of our destiny and sup- ply chain,” said Jim Cousineau, SVP pharmacy % change vs. 2010: -3% Brookshire’s has launched a warehouse in operations. The warehouse also ties in perfectly No. of stores: 151 Tyler, Texas, to house generic prescription items. with the $3.99 prescriptions the chain continues No. of stores with Rx: 113 “It gives us a little more control in our product to offer and the expansion of the chain’s pharma- Avg. store size: 40,000 sq. ft. selection and management, and allows us to be cies. Cousineau said that the company is “in a rea- Rx sales: $300 million sonably aggressive remodel program for the next % of sales from Rx: 14% three years, as well as adding a few new stores.” Sales per store: $14.2 million All of the pharmacies in these new stores will hold diagnostic services that are, to-date, Source: DSN estimates offered in just four Brookshire’s stores. These include blood glucose and body mass index Health Prescription Plan, through which con- screenings. The new stores also will have in- sumers can purchase a $10 membership fee, “to depth nutrition centers. Brookshire’s phar- receive generic and brand prescriptions at very macies also are continuing a test of its Fresh competitive pricing,” Cousineau explained.

HQ: West Sacramento, Calif. Fighting the competition 2011 sales: $3 billion raley’s Operating under four brands — Raley’s, Bel- pharmacy and the food departments, providing % change vs. 2010: -6.2% Air, Nob Hill and Food Source — Raley’s has information on everything from high blood pres- No. of stores: 130 fewer stores and pharmacies than it did a year sure and dry skin to macular degeneration and No. of stores with Rx: 100 ago. Competition certainly is heating up for the cholesterol. There also are A to Z indexes of health Avg. store size: 42,000 sq. ft. West Sacramento, Calif.-based chain. In March, conditions, drugs, and vitamins and minerals. Rx sales: $240 million British-owned Fresh & Easy opened the first of Customers also can refill their prescriptions % of sales from Rx: 8% five stores it has planned for the Sacramento re- online, and there’s an auto-fill option through Sales per store: $23.1 million gion. plans to open a the chain’s Readyfill Program. Raley’s contin- store in April, and ues to offer 30-day fills of generic drugs for $3.99 Source: DSN estimates also plans to enter the area. and 90-day fills for $9.99. Raley’s pharmacies continue to offer a host Immunizations are offered at many stores, Nutrition Scoring System was introduced in of services and to have a strong online presence. including hepatitis A, B and C; shingles; teta- all Raley’s, Bel Air and Nob Hill Foods stores The company’s website is a joint offering from the nus; and pneumonia. And in stores, the NuVal last September.

Freeing up pharmacists HQ: Novi, Mich.

Technology is the 2012 focus of Sav-Mor in Sav-Mor’s busiest locations, with the goals 2011 sales: $320 million saV-mor Drug Stores. This year, the franchised retailer of both accuracy and documentation. “This % change vs. 2010: NA will introduce new workflow software inte- will also take some pressure off the pharmacy No. of stores: 78* grated into its software from Health Business staff — they have so much pressure now from No. of stores with Rx: 78* Systems “with the hope of freeing up the phar- the PBMs,” Grossman explained. And by the Avg. store size: 12,000 sq. ft. macists’ time so they can spend more time with end of the year, Sav-Mor also is looking to use Rx sales: $272 million the patients,” CEO Richard Grossman said. The central fill. % of sales from Rx: 85% company will begin implementation in April. “We’re looking for some different avenues Sales per store: $14.1 million Sav-Mor also is exploring optics technology to help in the healthcare field, and it’s really from Innovation, which Grossman described changing how we’re doing pharmacy,” Gross- * All franchised Source: Company reports, DSN estimates as “a very unique way of counting. It will take man said. “We’re hoping that by bringing in a picture of the tablets that we count and keep better technology, we’ll free the pharmacist up pharmacists certified in different disease states it in our database.” in the cognitive area.” counseling patients. Pharmacists also offer The optics technology will be installed only For example, some Sav-Mor locations have one-on-one medication reviews.

24 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

HQ: Matthews, N.C. Harris t name change marks rise 2011 sales: $4.3 billion By JiM Frederick of a $215 million growth plan that includes seven % change vs. 2010: 4.5% new stores and 12 major remodels in 2012. No. of stores: 204* Ruddick Corp. is now Harris Teeter Super- Behind the chain’s success: a devotion to high- No. of stores with Rx: 133* markets Inc. On March 28, the supermarket concept, “exceptionally clean” stores that show- Avg. store size: 48,129 sq. ft. eeter chain’s parent company’s board of directors case service departments like prepared foods, as Rx sales: $300 million voted to change the firm’s name to that of its well as a growing menu of pharmacy-based and % of sales from Rx: 7% erstwhile subsidiary; elevate Harris Teeter’s online health-and-wellness offerings under the Sales per store: $21 million president, Frederick Morganthall II, to president “yourwellness” brand. Harris Teeter’s pharma- and COO of the new corporation; and relocate cists offer free screenings for allergies and drug * As of fiscal year ended Oct. 2, 2011 the company’s headquarters to those of Harris interactions, complete medication profiles, flu Source: Company reports, DSN estimates Teeter in Matthews, N.C. shots and follow-up calls with parents for any generic diabetes and antibiotic medicines. Harris Teeter ended fiscal 2011 in October 2011 child receiving an antibiotic prescription. Members of the chain’s discount program also with 204 supermarkets, including 133 units with Its Generic Prescription Savings Club offers can save on eyeglasses, contact lenses, dental full pharmacy departments. Since then, the com- 30- and 90-day supplies of many multisource cleanings, x-rays, fillings, vitamins, hearing aids pany has added several more stores in the course drugs, along with free 14-day supplies of some and diabetic supplies.

HQ: Maple Grove, Minn. tHri F ‘Warmth’ key to service 2011 sales: $312.6 million % change vs. 2010: 3.5% Think northern Minnesota or North Dakota bined with that culture is a sophisticated pallet of No. of stores: 83 ty W H near the Canadian border — Bismarck, N.D., high-touch, data-enriched health services, infor- No. of stores with Rx: 83 say — and the first thing that comes to mind mation technology and telemedicine. might be “cold.” But this is the special province Thrifty White operates 83 stores, services an- Avg. store size: 4,500 sq. ft. Rx sales: $250.1 million

of Thrifty White, and the storied drug retailer has other 69 independent drug stores throughout ite built a solid niche in the nation’s coldest locales the upper Midwest and owns a long-term care % of sales from Rx: 80% by thawing generations of loyal customers with pharmacy business with high-tech distribution, Sales per store: $3.8 million mom-and-pop-style personal service, provided infusion therapy and consulting services. What’s Source: DSN estimates by friendly employees drawn largely from the more, that LTC pharmacy serves as a central fill communities in which they’re based. site “that moves most maintenance script refills munizations, brown bag reviews, automated Tim Weippert, Thrifty White’s VP pharmacy out of [the] pharmacy,” noted the chain. refills and generic discounts and home deliv- operations, described it simply as “warmth” in Among the company’s offerings are dia- ery. Thrifty White also has offered remote-site working with patients and families. But com- betes and MTM management, chainwide im- telepharmacy services since 2003.

HQ: Alexandria, Va. Care grows beyond Capital 2011 sales: $343 million % change vs. 2010: 54% By Michael Johnsen Care has extended its proposition well beyond Wash- No. of stores: 82 ington, D.C. “We’ve been able to expand up and No. of stores with Rx: 82 It was only a few years ago that Care Pharma- out of our traditional operating area up and down Avg. store size: 3,500 sq. ft. cies was the beltway bandit of community phar- the coast,” acknowledged Michael Wysong, Care macy. Now the independent pharmacy group Pharmacies CEO. That takes the number of mem- Rx sales: $325.9 million ber pharmacies from 53 at this time last year to 82. % of sales from Rx: 95% Care Pharmacies, an operating group that Sales per store: $4.2 million is owned by each of the pharmacies that par- Source: DSN estimates ticipates, not only helps lower acquisition costs, boost front-end sales and leverage disease-state vider of antiretroviral medications for Medicaid management programs, but what provides true and ADAP patients in the District of Columbia point of differentiation is its back-end support of over the past decade, and now is tapping into its members in the specialty space. The Care that pedigree to help its members expand across Pharmacies network has been the sole pro- a number of specialty categories.

25 • April 2012 DrugStoreNewS.com TOP 50 SCORERS sporting unique offerings HQ: Medina, Ohio 2011 sales: $557 million Drug m art By Michael Johnsen local, passionate demographic with discretion- DisCount ary income — the rabid Cleveland sports fan. % change vs. 2010: 3.8% The perennial Ohio pharmacy operator Dis- The chain has positioned a Veritix Machine by No. of stores: 71 count Drug Mart successfully has tapped into a its cosmetics counter that sells tickets to many No. of stores with Rx: 71 of the local events hosted in sporting arenas. Avg. store size: 25,000 sq. ft. Discount Drug Mart also features an exclu- Rx sales: $247.3 million sive Pro Points program that is tied into its loy- % of sales from Rx: 44.4% alty Courtesy Plus card that allows consumers Sales per store: $8 million to collect points toward sports merchandise or game-time experiences across all of the major Source: Company reports and some local sports franchises. The company also has expanded its personal have partnered with Parma Community Gen- one-on-one wig fittings from a specialist for eral Hospital and have opened walk-in clinics. women suffering from cancer. These ExpressCare locations also perform vac- And select Discount Drug Mart locations cination services and physicals.

improving quality of life HQ: Modesto, Calif. saVe-m art By aManda Baltazar the company partners with health resources to 2011 sales: $4.6 billion provide health information for disease states. % change vs. 2010: -2.1% Save-Mart’s plan is to be a health-and- “We’re hoping to migrate down the path where No. of stores: 230 wellness resource for its customers, integrat- we can offer in-store screenings, but we haven’t No. of stores with Rx: 108 ing food and health into its pharmacies. been there yet,” said Vaughan. “We have Avg. store size: 60,000 sq. ft. In the past year its 108 pharmacies have launched [in 2009] a successful [pharmacist Rx sales: $225.4 million begun providing educational materials in the administered] immunization program and last % of sales from Rx: 4.9% form of healthy recipes, and one recipe is print- year did double the number of immunizations Sales per store: $20 million ed out with each prescription. In the future, the we did in 2010.” chain hopes to link healthy recipes to specific Save-Mart continues to offer its “19-minute Source: DSN estimates disease states, said Robert Vaughan, senior di- promise,” which provides a free dinner and a rector of pharmacy operations. movie — in the form a $10 gift card for a food rentals at Redbox kiosks — if it does not fill a Save-Mart also has a nutritionist on staff, and purchase and a free movie coupon for DVD prescription within 19 minutes.

immunizations boost sales HQ: Sunbury, Pa. Weis m Adjusting for an extra week in 2011, Weis efforts. Weis recently partnered with Penn 2011 sales: $2.8 billion pharmacy, health and wellness sales increased State Hershey Breast Center and the Penn- % change vs. 2010: 5% 2.3% in 2011 versus 2010, the company report- sylvania Department of Health’s Healthy No. of stores: 161 ed, citing a strong immunization program and Woman Program to provide mammograms to No. of stores with Rx: 122 arkets increased private-label penetration across sev- women in need. Avg. store size: 49,000 sq. ft. eral over-the-counter categories. Weis Markets in January named former Rx sales: $242.2 million Weis’ pharmacy-based immunization pro- Walgreens veteran Joseph Douglas as its VP % of sales from Rx: 8.8% gram has been expanded in the past year to all pharmacy. Douglas not only will oversee the Sales per store: $17.1 million stores and currently includes 272 immuniza- day-to-day merchandising, operation and man- tion-certified Weis pharmacists, which repre- agement of 122 pharmacies, but also will direct Source: Company reports sent 97% of the grocer’s pharmacist staff. the company’s lifestyle initiatives team, which Along with immunizations, Weis Markets was brought under the pharmacy operations In addition, the grocer has promoted Mike is partnering with local healthcare centers in umbrella last year in an effort to better leverage Mignola to VP store operations and Bruno Garis- support of community health-and-wellness the pharmacist and nutritionist. to to VP center store sales and merchandising.

26 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

HQ: St. Louis schnucks touts specialty 2011 sales: $2.6 billion sCHnuCks By aManda Baltazar Schnuck Markets has four specialty pharma- % change vs. 2010: 4% cies and a fifth will be opening this spring in No. of stores: 100 St. Louis-based Schnuck Markets opened its Springfield, Ill., inside St. John’s Hospital. The No. of stores with Rx: 95* first specialty pharmacies in 2009 and 2010, and company also is watching carefully for more op- Avg. store size: 61,000 sq. ft. “we’ve had fantastic responses,” according to portunities to expand, Chism said. Rx sales: $208 million pharmacy supervisor David Chism. “They quick- It’s not just the specialized knowledge and % of sales from Rx: 8% ly became our top volume locations and have ex- medicines that these pharmacies offer. They’re Sales per store: $2.6 million ceeded both sales and profit expectations.” also popular because they offer personalized ser- The pharmacies offer services for patients liv- vices, including home delivery, retail pricing pro- * Excluding four specialty pharmacies Source: Company reports, DSN estimates ing with chronic conditions — the top ones being grams, the ability to navigate third parties and HIV/AIDS, hepatitis, multiple sclerosis, rheu- often the capability to eliminate out-of-pocket ex- Schnucks’ pharmacies and food departments matoid arthritis and transplant. In fact, Schnuck penses for customers. More generally, Schnucks’ also run a “Fruits & Veggies — More Matters” Markets is the No. 1 HIV pharmacy services pro- 99 pharmacies have updated technology to allow program. The pharmacy “is a great place to vider in the St. Louis metropolitan area and central existing patients to request refills and new pa- disseminate literature,” company spokesman Illinois, Chism added. tients to transfer prescriptions via its website. Paul Simon said.

a whole-store approach HQ: Abingdon, Texas Health care, drugs and food mingle seamless- closely together. Our pharmacists are diligent in 2011 sales: $2.1 billion ly at K-VA-T’s Food City stores, with the goal of pointing out foods that may interact with the pa- % change vs. 2010: 5% k-Va-t keeping customers as healthy as possible. tients’ medications or [suggesting] foods that may No. of stores: 106 “All of the departments in our stores work help improve their disease state,” said Mickey No. of stores with Rx: 76 Blazer, director of pharmacy operations. Avg. store size: 42,000 sq. ft. To aid customers in making healthy choices, Rx sales: $210 million two years ago the chain launched NuVal, a nutri- % of sales from Rx: 10% tional scoring system that helps consumers make Sales per store: $19.8 million better food choices. Food City has added drive- throughs to many stores to improve accessibility Source: DSN estimates and convenience, and pharmacists provide such services as immunizations and medication ers to earn discounts on over-the-counter medi- therapy management. It also allows custom- cations for select products for diabetes. b

bartell ahead of the curve HQ: Seattle artell D By alaric dearMent ings. The chain had sponsored a similar event 2011 sales: $398 million earlier in the year that also included free health % change vs. 2010: 8.74% Bartell Drugs may be one of the oldest re- testing and screenings for such conditions as No. of stores: 58 tail pharmacy chains in the country, but it con- diabetes, hypertension and osteoporosis. No. of stores with Rx: 58 sistently has maintained its local identity and In September 2011, Bartell’s unveiled its Avg. store size: 15,000 sq. ft. rug s dedication to the Seattle area that it serves. new store concept. The store includes a “Fresh Rx sales: $211 million And despite its relatively small size, Bartell Beauty” cosmetics section with natural and % of sales from Rx: 53% also has stayed ahead of the curve. organic product lines; an “Urban Market” sec- Sales per store: $6.86 million In October, the chain sponsored its latest tion that highlights unique and locally pro- “Health & Beauty Week” at 14 of its stores. The duced products; a “Wellness Courtyard” with Source: Company reports, DSN estimates events included flu shot clinics, hair-styling vitamins, supplements and healthy bever- demonstrations sponsored by Conair and free ages; and a “Sweets & Snacks” area with new the company does not plan to open any new “mini makeovers.” Some of the events also in- displays and lighting. Bartell’s spokesman stores in 2012, it will convert six stores to the cluded mobile digital mammography screen- Barry Bartlett told Drug Store News that while new format.

27 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

HQ: Cleveland m Deals reign at marc’s 2011 sales: $1.1 billion ar C g By JiM Frederick consumers in northeast Ohio and Connecticut % change vs. 2010: 7% — where Glassman operates six Xpect off-price No. of stores: 62 lassman Four-dollar generics? Discount retailer Marc stores — have come to expect. No. of stores with Rx: 44 Glassman can do a lot better than that. On its Marc’s said it targets “the value-conscious Avg. store size: 40,000 – 50,000 sq. ft. website, Cleveland-based Marc’s offers 30-day family grocery shopper” with a basic mix of Rx sales: $146 million supplies of more than 50 commonly prescribed food, health-and-beauty aids and general mer- % of sales from Rx: 13% generic medicines for $1.98, with 90-day sup- chandise items at the front end, and diabetic sup- Sales per store: $17 million plies selling for $5.86. More than 400 other me- plies, such as glucose monitors, at the pharmacy. too meds are priced in line with the new market Inventory is bought in huge quantities to Source: DSN estimates benchmark for commodity-priced generics at lock in the lowest possible price so much of the $3.99 and $9.99 for 30- and 90-day fills, respec- savings can be passed on in what amounts to a ity to excite consumers and keep them coming tively. The eye-catching, under-$2 price tag for classic retail productivity loop. But a major key back — is its constantly rotating mix of closeout some generics is the kind of discount program to Marc’s success — and the source of its abil- merchandise at steep discounts.

Focused on growth HQ: Miami

2011 sales: $328 million naVarro By antoinette alexander The company also has built out a central-fill % change vs. 2010: 2.7% location that not only will help serve patients At Navarro Discount Pharmacy the focus in the specialty business, but also will enable No. of stores: 31 can be summarized in one word: growth. Navarro to shift some volume from its retail No. of stores with Rx: 30 “For us to ... continue to be able to grow our pharmacy, giving its pharmacists more time to Avg. store size: 15,437 sq. ft. business, one of the things we are doing, besides counsel patients in the store. The company also Rx sales: $113 million opening up new stores and pharmacies in this opened up a call center to take the call volume % of sales from Rx: 35.8% region, is to go into the specialty pharmacy busi- out of the stores. Sales per store: $11.1 million ness,” said Juan Ortiz, CEO of Navarro Discount Meanwhile, Navarro is in the midst of a 20- Pharmacy. The specialty pharmacy business plus store expansion strategy. In addition, it add- Source: Company reports will be added in the second quarter and will fo- ed e-commerce capabilities to its website about a cus on certain disease states that are prevalent in year ago and launched the Navarro RX Mobile company also has launched Vida Mia, its bilin- the region in which the retailer operates. App, a free pharmacy mobile application. The gual private-label brand of Hispanic products.

HQ: Point Pleasant, W.Va. Fruth unveils sleek decor 2011 sales: $134.5 million

With a refreshed pharmacy department, a rector of operations to spearhead the implemen- % change vs. 2010: 1.6% Frut H new loyalty program in place and an eye on tation of new store decor, primarily in the phar- No. of stores: 25 potential acquisition opportunities, Fruth Phar- macy department. As of press time, that new No. of stores with Rx: 25 macy has a lot of reasons to be optimistic. store decor had been implemented in about half Avg. store size: 10,150 sq. ft. Just over a year ago, the company hired a di- of the company’s pharmacy locations. Rx sales: $113 million “We did an updated logo a couple of years % of sales from Rx: 85.6% ago, which really gave us a very sleek and fresh Sales per store: $5.4 million look. ... So we are really trying to bring our stores back into that so everything has the new logo,” Source: Company reports said Lynne Fruth, president and chairman. In addition, the waiting area in the pharmacy has get 15% off Quality Choice private-label products been expanded and upgraded with nicer seat- every day. As of press time, between 15,000 and ing and wood laminate flooring. 20,000 customers had signed up for the program. In October 2011, the company launched a loy- In May, the company is looking to break alty program, which enables shoppers to earn ground on its 26th store location in Ohio, the first one point for every $1 purchase. Members also new store opening since 2006.

28 • April 2012 DrugStoreNewS.com TOP 50 SCORERS

HQ: Sioux Falls, S.D. lewis celebrates 70 years leWis Drug 2011 sales: $152 million By antoinette alexander fine-tuning the floor plan and, so far, it has been a very successful store,” said Griffin, who noted % change vs. 2010: 4.8% Year 2012 is shaping up to be a significant one that the prototype likely will be implemented in No. of stores: 34 for Lewis Drug as the regional player celebrates its two or three additional stores this year. No. of stores with Rx: 34 70th anniversary, further enhances its new store In pharmacy, the company continues to Avg. store size: 40,000 sq. ft.; 5,000 sq. ft.* prototype and ramps up its pharmacy services. see success with its participation in the Sioux Rx sales: $76 million The company is working to further enhance Falls High Blood Pressure Initiative “The Big % of sales from Rx: 50% its new prototype in Sioux Falls, S.D. “What we Squeeze” for high blood pressure awareness Sales per store: $4.8 million are doing is working with that new prototype and detection. Last year, Lewis Drug did 2,500 and refining what works,” said Mark Griffin, screenings, and this year plans to do about * Operates two formats Source: Company reports president and CEO. 5,000, said Bill Ladwig, SVP pharmacy. The retailer is looking to further expand its To help patients take their medications as direct- find those people who [take] multiple medications groceries and pickup items for lunch and din- ed, the company is further evolving its synchro- and then we synchronize their med fills. We got ner. It also is expanding its seasonal and wine nized med fill program, which launched about a a local health plan to waive the early charges to and spirits businesses. “We are basically just year ago. “We data mine our prescription files to make synchronization easier,” Ladwig said.

HQ: Boulder, Colo. Helping patients feel better 2011 sales: $94 million PHarmaCa % change vs. 2010: 7% By Michael Johnsen ence and the chain’s Feel Better rewards program No. of stores: 24 has increased sales by 7%. No. of stores with Rx: 24 Pharmaca Integrative Pharmacy has been at- “We changed our marketing emphasis from the Avg. store size: 4,200 sq. ft. tracting a younger demographic into its pharma- 50-plus down to 35,” said Mark Panzer, Pharmaca cies, which along with a robust e-commerce pres- president and CEO. That means career-oriented, Rx sales: $53.6 million dual-income up-and-coming families who are fi- % of sales from Rx: 57% nancially secure. Many times that correlates with Sales per store: $3.9 million a stronger interest in alternative remedies and an Source: DSN estimates ability to trade up to the higher price points. The e-commerce component, now entering its Pharmaca to better target promotions through a second year, helps to extend the Pharmaca brand trademarked program called WellM@il. “Taking well beyond its operating markets. And the that loyalty data, you’re able to target shopping Feel Better cash-back rewards program enables behavior based on patterns,” Panzer said. tradition of compounding HQ: Wadsworth, Ohio 2011 sales: $43.5 million* ritzman By JiM Frederick week free home delivery, highly accessible phar- % change vs. 2010: 15.1% macists who provide in-depth counseling and No. of stores: 20* For more than 60 years, family-owned Ritzman medication therapy management, and its own No. of stores with Rx: 20* Pharmacies has brought a strong blend of clinical brand of nutritional supplements. Avg. store size: 1,800 sq. ft. pharmacy expertise and personalized hometown Ritzman also has emerged as a leading exem- Rx sales: $36.3 million service to customers in northeast Ohio. plar of more “natural” approaches to wellness Among its core competencies are drug com- and disease prevention, with a broad selection % of sales from Rx: 83.4% pounding — Ritzman has long been known of homeopathic products positioned as alterna- Sales per store: $2.2 million

for its pharmacists’ ability to compound drugs tives to traditional over-the-counter remedies. * Ritzman acquired 11 pharmacy operations — and a pharmacy that deals in expensive and “We have combined the prescription and within Buehler’s Fresh Foods in October 2011 Source: DSN estimates highly targeted specialty medications and home- natural health pharmacies to offer complemen- infusion services for patients with serious and tary services, such as massage therapy, diabetic ments,” Ritzman reported. chronic conditions. supplies, home infusion, natural products, or- In addition, Ritzman purchased 11 in-store Ritzman’s menu of services includes twice-a- ganic foods, high-quality vitamins and supple- pharmacies from Buehler Food Markets last fall.

29 • April 2012 DrugStoreNewS.com