USA Drug gets back in growth mode
There’s nothing like a recession for focusing merchants on what matters most. For USA Drug, that meant concentrating on core markets, cutting costs and recharging its image for down-home value, neighborly service and a broadly merchandised front end focused on local consumer preferences.
The company’s departure in March 2010 from Memphis, where it sold its Super D and Ike’s stores to Walgreens, may have been the tonic the company needed. USA Drug hit record profits in 2010, said president and CEO Joe Courtright, and quickly returned to growth mode. “This year, we have a goal of 20 pharmacy acquisitions,” Courtright noted. Another goal for 2011: the conversion of all 140 stores to ComputerRx, a new pharmacy automation system.
Like other pharmacies, USA Drug was snagged last year by what Courtright called the “deterioration in average prescription price, especially as a result of new-to-market generics.” But diabetic and Alzheimer’s medicines are continuing to drive sales, he added, and “we expect great prescription comps,” as well as “an increase in comp OTC sales of 4% to 5% for the upcoming year,” he said.
Harris Teeter blends wellness, pharmacy
One way for a supermarket to convey its health-and-wellness commitment to customers is to build a marketing campaign around it.
In Harris Teeter’s case, the campaign is “Yourwellness.” Now in its sixth year, the initiative offers “evidence-based guidance on important health issues” and help with nutritional choices throughout the store, according to the company.
Offerings include a Yourwellness e-newsletter, interactive online applications and nutritional tags on products throughout the stores, along with advice from nutritional experts via online videos, blogs and e-newsletters. A membership card offers discounts on such healthcare services as eyeglasses, contact lenses, dental cleanings, X-rays, fillings, vitamins, hearing aids and diabetic supplies, along with prescriptions.
At the company’s more than 125 pharmacies, customers can qualify for discounted flu shots, $4 generics, an automatic refill program and a follow-up phone program by pharmacists, along with a new MedFlash program that provides up-to-date, password-protected access to their prescription records.
Harris Teeter also appeals to health-conscious consumers with big selections of organic foods, an in-store Fishermans Market that promotes sustainable fishing practices and partnerships with local fishermen, a Fresh Foods Market, its own brand of Earth Wise wines and a range of environmental initiatives under a program it dubs My Earth that encompass everything from packaging reduction and recycling to cultivating locally grown and organic produce.
Based near Charlotte, N.C., Harris Teeter is steadily expanding its upscale store format. The chain passed a milestone in September with the opening of its 200th supermarket in Manassas, Va. Since then, new units have sprouted in Washington, D.C.; Norfolk, Va.; and in Wake Forest and Hampstead, N.C., bringing store count to 204 units in North and South Carolina, Virginia, Georgia, Tennessee, Florida, Maryland, Delaware and the District of Columbia.
Sam’s Club gunning for FDM market
Growing the health-and-wellness business remains a top priority for Sam’s Club as the warehouse club operator has identified those key categories as areas where it can demonstrate value, drive member loyalty and gain market share.
Sam’s has high expectations for health and wellness, along with food and consumables, as it looks to deliver on its brand promise of “savings made simple” and maintain the same-store sales momentum experienced throughout 2010 that culminated with a 2.7% gain in the fourth quarter.
That means placing an increased emphasis on the presentation of health-and-wellness categories in clubs while adding new services, such as hearing centers, conducting monthly health screenings and participating in exclusive distribution agreements with such well-known brands as GNC.
Looking at the company’s new and remodeled clubs, there is an unmistakable emphasis on health and wellness from the moment members set foot in the building. The pharmacy is highly visible thanks to colorful overhead signs, while leading brands in all the major drug store categories are merchandised on what typically are four 50-ft.-long shelving runs that lead to the pharmacy.
It’s a good look, and the business results are there, according to the company. So Sam’s remains committed to a multiyear process that emphasizes upgrading the existing club shopping experience rather than significantly expanding beyond an existing base of 609 clubs. Sam’s Club will spend about $1 billion this year to remodel 60 to 70 clubs while opening, expanding or relocating an additional seven to 12 units.
And as it places further emphasis on health and wellness, it is conceivable the company could see more meaningful contribution from those categories. Last year, the health-and-wellness categories — which Sam’s Club defines as pharmacy, optical services and over-the-counter drugs — accounted for 5% of sales, the same as the prior year.