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SF mayor to drug stores: ‘The butt stops here’

BY Alaric DeArment

SAN FRANCISCO —While many smokers regard the drug store as a destination for cigarette purchases, residents of one of California’s largest cities might soon need to look elsewhere to feed their nic-fix.

Mayor Gavin Newsom proposed an amendment to the city’s health code in April that would ban tobacco sales at pharmacies and drug stores, but not grocery or big-box stores with pharmacies.

Similar bans are under consideration in New Hampshire, Illinois, Tennessee and New York

Of course, drug store chains strongly oppose San Francisco’s proposed ban.

“We question the fairness of prohibiting a drug store with a pharmacy from selling tobacco products, while a grocery store or a big-box store with a pharmacy would not be prohibited from selling tobacco products,” said Cheryl Slavinsky, director of public relations for Rite Aid Stores.

Supporters of the ban, however, distinguish drug stores from other retailers because of their role as part of the healthcare industry. The San Francisco proposal states that by selling tobacco products, pharmacies “convey tacit approval” of tobacco use and send mixed messages to consumers.

Prescription for Change, a project of the California Medical Association Foundation to persuade pharmacies to stop selling tobacco, doesn’t mince words: “In this singular act of hypocrisy, pharmacies are legitimizing tobacco use to our kids.”

According to its Web site, more than 900 pharmacies in California no longer sell tobacco, though it did not specify whether they had stopped because of outside pressure, and representatives from the group could not be reached for comment.

Two East Coast supermarket chains, Wegmans Food Markets and DeCicco Family Markets, also have stopped selling tobacco. Wegmans spokeswoman Jo Natale said the chain’s decision, along with encouraging employees to quit smoking was out of concern for health rather than public pressure.

West Coast drug store chain Longs Drug sells cigarettes, but it also emphasizes smoking cessation.

“One might conclude that a drug store might, in fact, be a better environment for someone to look for tobacco products because of the focus on cessation products,” Longs spokesman Mark Holz said.

According to Nielsen, tobacco and accessories sales at drug stores were almost $2.66 billion in 2007.

Newsom’s proposal went to a board of supervisors committee June 5. As of press time, the committee had yet to schedule it for a vote.

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CVS Caremark to expand headquarters, add positions

BY Antoinette Alexander

WOONSOCKET, R.I. CVS Caremark has announced expansion plans for its headquarters over the next two years, a move that will help support the company’s continued growth and current hiring expectations of more than 200 new positions on its corporate campus.

The nature of the new jobs was not disclosed. In Rhode Island, the company currently employs 5,800 associates.

The plans are to build two new 150,000-square-foot office facilities in the Highland Corporate Park in Cumberland, R.I. The company has been based in Highland Corporate Park, which is jointly located in Cumberland and Woonsocket, since 1982. The company significantly expanded its customer support center facilities in 1988 and again in 2000.

“Our company was founded in Rhode Island more than 40 years ago and we feel fortunate to be able to continually reinvest in our home state,” stated Tom Ryan, chairman, president and chief executive officer. “As the largest company in Rhode Island we are looking to further expand our base of operations to support our continued growth and, as a result, increase our workforce over the next few years.”

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A&P announces fiscal Q1 improvements

BY Antoinette Alexander

MONTVALE, N.J. A&P, which operates 446 stores under such banners as A&P, Pathmark and Waldbaum’s, announced on Friday improved results for the first quarter as it nears the completion of the Pathmark integration.

“The first quarter of 2008 clearly demonstrates our continuing progression in operating improvement with the achievement of our fourth straight quarter of comparable store sales of over 3 percent,” stated Eric Claus, president and chief executive officer. “Further, Pathmark is already achieving positive results with comparable store sales climbing above 3 percent for the first time in many years. The company is also well underway with the completion of the Pathmark integration, as many of the planned milestones have been achieved. As of the end of the first quarter, our annualized run-rate of synergies is approximately $100 million.”

Sales for the quarter totaled $2.9 billion compared with $1.7 billion in the year-ago period. Same-store sales rose 3.2 percent, which excludes sales for Pathmark stores acquired in December 2007. Same-store sales for Pathmark, measured during the same period, rose 3.1 percent.

Net income from continuing operations was $3.8 million, with a net loss per diluted share of 48 cents after adjusting for non-operating income related to fair value adjustments. This compares with income of $61.4 million, or $1.45 per diluted share, in the year-ago period.

The company did not break out pharmacy sales results.

As previously reported by Drug Store News, the company announced during the quarter an integral step in its transformation—the conversion of the majority of SuperFresh stores in the Philadelphia market to the recently premiered Price Impact format under the Pathmark Sav-A-Center banner and a number of SuperFresh locations retaining the Fresh format with significant upgrades.

Also during the quarter, the supermarket chain completed the remodel of A&P Fresh in Holmdel, N.J., to the updated Fresh format and began remodeling additional stores. The company also premiered its Price Impact format in the Irvington and Edison Pathmark stores.

“The remainder of fiscal 2008 will be focused on progressing the company further toward operating profitability by: moving forward our operating and aggressive merchandising strategies; maintaining cost control and reduction disciplines throughout the business. Integral to our drive to profitability is the continued and ongoing execution of capital improvement projects all geared for maximum return, and particularly weighted to value propositions,” stated Claus.

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