Opportunity for drug chains lies in upgrading baskets
LAKEWOOD, Colo. —During this recessionary period, shoppers may be abandoning the convenience of the stand-alone drug store format in favor of their mass merchant or grocery pharmacy; it’s one less trip, according to 33% of shoppers who reported that they are consolidating trips as a cost-saving strategy.
Overall, 37% of American shoppers have reported purchasing less across all categories at drug stores, with 20% buying fewer prescription drugs compared with last year. In addition to trip consolidation, 44% of respondents to a recent consumer survey conducted by the Integer Group and MARC Research reported that discount or loyalty programs have prompted them to relocate their pharmacy business.
Pharmacy operators have a few options to stave off consumer erosion, advised Andrew Morse, director of insight and strategy for the Integer Group. “[For example], as more monthly customers seek discount prescription alternatives, one thing to do is reinforce the role of the drug chain as a trusted health adviser, not just a place to drop off and pick up prescriptions,” he said. “The success of WebMD and the MinuteClinic model suggests that accessible, affordable, basic health information is in demand.”
And drug stores do enjoy some advantages, such as a high shopper conversion rate of 83%. Visitors to drug stores don’t just come to shop—they buy. “In department stores, home stores and electronics stores, for example, shoppers are more likely to be browsing, planning a future purchase or [engaging in] competitive pricing,” Morse said.
“In drug stores, like grocery and convenience stores, most visitors have at least one shopping objective in mind when they walk in the door,” Morse continued. “The opportunity for drug chains is, simply, once the shopper walks in to buy one item, how can they upgrade that basket?”
Kroger declares quarterly dividend
CINCINNATI The Kroger Co. announced that its board of directors declared a quarterly dividend of 9 cents per share to be paid on Sept. 1 to shareholders of record at of the close of business on Aug. 14.
Kroger, one of the nation’s largest retail grocery chains, employs more than 326,000 associates, who serve customers in 2,475 supermarkets and multi-department stores in 31 states.
On Thursday, the company announced that its president and COO Don McGeorge was retiring. McGeorge has been replaced by W. Rodney McMullen.
Walgreens to test diabetes care model
NEW YORK Walgreens continues to flesh out its revamped strategy to be the nation’s most convenient and accessible provider of pharmacy and health-and-wellness services.
The latest plank in that platform is its plan to test a pharmacy-driven outreach and support program for patients with diabetes.
Diabetic-care services and product presentations are nothing new in the nation’s chain and independent drug stores; every pharmacy leader knows that diabetes is a major, (often undiagnosed) health challenge and a “gateway” disease that usually subjects its sufferers to a slew of other related conditions involving the circulatory system, the skin and other organs. It’s also no secret that diabetics generate far more in annual drug store sales to treat these related conditions.
What makes Walgreens’ pilot program worthy of notice are two things.
First, with some 6,800 retail pharmacies, 350 in-store and worksite clinics and a network of specialty pharmacies across the United States, the company wields enormous potential power in the healthcare marketplace. If it expands its fledgling diabetes pilot beyond the test stage, it has thousands of “points of care” through which it could offer diabetes support programs and other disease management offerings. It’s a huge potential resource to offer diabetic patients and their employer-based or government-sponsored health plans, not to mention those patients’ overburdened, time-constrained primary care doctors.
Second, Walgreens is very deliberately positioning its diabetes care offering as a part of a much broader, integrated healthcare platform that links patients in the program to all the company’s health-and-wellness capabilities, said Walgreens CEO Greg Wasson. And it dovetails neatly with the Obama administration’s call for “more preventive care and better access,” in the words of Walgreens’ top manager.