Pharmacy, makeover lifts Fred’s sales
Fred’s last year migrated its more than 300 pharmacies to a more convenient front-of-store position in an effort to boost pharmacy revenue — and it worked. Fred’s 2010 pharmacy sales growth of 4.8% outpaced the discounter’s overall sales growth of 3% for the year. At the time Fred’s began executing against the pharmacy makeover, the company reported that test stores featuring front-of-store pharmacies enjoyed 20% higher sales per square foot as compared with the company’s average.
Fred’s opened 21 new pharmacies throughout fiscal 2010 and plans additional pharmacy location growth of between 10 and 15 in 2011. “Pharmacy expansion not only enhances margins; it also serves as a proven driver of customer trips and loyalty,” Bruce Efird, Fred’s CEO, told analysts in March.
Fred’s pharmacy department also was successful in administering 7% more immunizations to patients in 2010 — that’s a build on top of the 17% increase in immunizations Fred’s realized in 2010 vs. 2009 because of H1N1.
Fred’s also will continue to emphasize the better merchandising mixes to come out of its Core 5 program, which is designed to highlight five strong trip-driving departments where Fred’s feels it has a marketable advantage over other small-box competitors — notably pharmacy, celebration and party, pet products, paper and chemical, and home products. By the end of 2010, Fred’s had roughly 30% of its store base in the Core 5 layout, which features improved merchandising, signage and adjacencies.
And while Fred’s projects flat comparable pharmacy sales across 2011 because of the number of branded pharmaceuticals losing patent protection and pharmacy reimbursement pressures on the average manufacturing price at the state level, Efird tabbed pharmacy as a key growth driver for Fred’s. “On average, stores with pharmacies have higher front-end traffic, consistently performing at 10% or better than stores without pharmacies,” he said.
ShopRite adds dietitians, mobile spaces
ShopRite is striving to help its shoppers shop right by focusing on health and wellness and added convenience. To help customers live healthier lives, the grocer has, at select locations, an on-site registered dietitian.
Wakefern implemented the retail dietitian program in 2006, and today there are 20 retail dietitians working in 23 ShopRite locations.
This free service offers customers the opportunity to discuss their health and dietary needs with a nutrition professional to create customized meal plans. The dietitian can educate customers on a number of issues, including how to shop for healthy meals and proper nutrition for specific medical conditions, and can schedule monthly screenings for specific health issues, such as diabetes and high cholesterol.
The dietitians are available to walk the aisles with customers for a personal touch, but there also are in-store shelf tags — e.g., gluten-free, organic, natural, fat-free, low-fat, sugar-free, reduced sugar, no sugar added and low sodium — to help customers navigate the aisles.
Online shoppers will find weekly articles and healthy “Right for Tonight” recipes that are posted by the corporate dietitian, and there’s also an Ask the Dietitian feature on the site to help educate consumers. In store, the grocer also offers monthly screenings for specific health issues, such as glucose screenings during November and cholesterol screenings in September.
Winn-Dixie renews ‘fresh & local’ appeal
If sports columnists covered Winn-Dixie, their story line would read something like this: The Jacksonville, Fla.-based retailer has climbed back into the ring as a slimmed-down and much-improved fighter competing in a lighter weight class.
The evidence is abundant that Winn-Dixie has regained its balance. In fiscal 2010 — a year hammered by recession and slack sales — the chain generated net earnings of $28.9 million, finished upgrading nearly half its store base, unveiled a dazzling new store prototype and poured $190 million into strategic improvements and the expansion of its “Fresh & Local” strategy.
Capping a long retrenchment, Winn-Dixie last year shed another 30 stores saddled with high lease costs and other problems. To restore profitability, it focused on “adjusting our promotional practices,” in the words of chairman, president and CEO Peter Lynch, and on the rebranding and expansion of its private brands, which now comprise nearly 4,000 products and account for 23% of “all the brands we sell in dollar terms,” according to the company.
Most significant, Winn-Dixie has remodeled roughly half its 484 supermarkets. Capping that renovation effort was the unveiling last year of a dramatically improved store prototype in Margate, Fla., and Covington, La., that highlights the company’s Fresh & Local market strategy.
Led by VP pharmacy John Fegan, a veteran of Ahold USA, the pharmacy division has certified all but a few of its 800 pharmacists to provide immunizations and some 400 of them to offer medication therapy management.
“With the availability of generics and the prices so low, it really comes down to the service … and [the] comfort the [customer] gets from walking in and talking with the pharmacist,” Fegan said.
Among recent innovations are a centralized prescription record system, called WD RxConnect, and an optional, automatic script-refill program.