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Sick economy, healthy business

Found in: Current Events, Economics, Store Openings & Closings
Wednesday
December 3, 2008
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Chris Churchill, of the Times Union newspaper in Albany, NY, has a good look into the expansion plans of drug stores like Walgreens, CVS, and Rite-Aid in the New York region: Sick economy, healthy business. Despite the downturn in the economy, drug stores have not completely cut out their expansion plans and are still opening new locations at a solid rate.

And despite the recession, the proliferation continues. Other retailers, shaken by falling sales, are limiting expansions — but nearly every planning board agenda, it seems, contains a drugstore proposal.

The retail economy is ill. But drugstores seem healthy.

“We’re not immune from what’s going on in the economy, but we’re better insulated,” said Michael DeAngelis, spokesman for Rhode Island-based CVS Caremark Corp. “People are still getting their prescriptions filled. They’re still getting sick.”

I think there are a lot of people in the industry, myself included, who spend a lot of time looking at the big picture – national plans and trends of retailers – that we overlook the unique impact that every retailer has on the different locales that they serve. I like articles like this that examine the localized plans of retailers.

Also to note and put out there as a disclaimer, that Chris reached out to me for my thoughts on these retailers expansion plans. I am quoted about midway down the first page of the article. Thanks to him for allowing me to share some of my thoughts with him.

NYC Chain Stores, By the Numbers

Found in: Retail
Friday
August 1, 2008
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http://farm1.static.flickr.com/156/400312331_8347c9bd0b_m.jpg'

Let’s play a game. I’ll name two retailers and you guess which one has more locations in the five boroughs of New York City. Ready?

Starbucks vs. Dunkin’ Donuts

McDonald’s vs. Burger King

Rite Aid vs. CVS

Coach vs. H&M vs. Pinkberry

Best Buy vs. American Apparel

According to a new study from the NYC-based think tank, Center for an Urban Future, the numbers are suprising.

Dunkin Donuts has more locations (341) in the five boroughs than Starbucks (235). Though Starbucks’ has more than double the amount of Manhattan locations (186 vs 78). McDonald’s has 248 locations compared to Burger King’s paltry 92. Rite Aid has 209 locations to CVS’s 108, but not as much as NYC-favorite Duane Reade (with 216 locations). Coach and H&M have as many NYC locations as California upstart Pinkberry (all with 12 locations in the city) and would you believe that American Apparel has more locations than Best Buy (16 vs 9).

The details revealed by the study are interesting, with a thorough breakdown of how many locations each retailer has in each borough. It is worth downloading the PDF and taking a look at their results.

Couple of interesting commentaries on the report from the New York Daily News, the New York Observer, and the New York Post.


Photo above from Flickr user lab2112, used under Creative Commons.

Express Lane for 6/4/2007

Found in: Customer Service, Express Lane
Monday
June 4, 2007
2 Comments

Stories that I’ve come across today on the web that I’d like to share:

Originally announced back in August, the Rite Aid purchase of Eckerd and Brooks pharmacy chains is official today. Rite Aid will have to divest certain properties to allow for competition. Conversion of the stores should take 16 months. Once this deal is complete, Rite Aid will be the third largest pharmacy chain in the US (behind Walgreens and CVS) and the predominant pharmacy retailer on the East Coast. More thoughts from the Albany Times Union.

I’ve got to say that I’m sad to see the Eckerd brand go. Part of it is the fact that the Eckerd stores in my area are newer than the Rite Aid locations, making for a more pleasurable shopping experience.

Last week the Motley Fool had a good look at Abercrombie & Fitch, this week they’ve got a good look at J.Crew. They’ve had a succesful IPO, improved their gross margin, increased revenue, and increased same store sales. Good times for that retailer.

Recently, Target introduced a line of wedding dresses and related apparel by Isaac Mizrahi. Today, the Chicago Tribune is talking about this, what it means for Target, and what it means for the industry.

Finally, lux.et.umbra is asking whether summer hours would improve business in Silicon Valley. Good thoughts. The budgets for small retailers is tight, but not being open when your customers want to shop is bad business. That’s not to say that everyone should be open 24 hours, but late hours during the Summer may not be a bad thing.

Report: Rite Aid to buy Eckerd, Brooks drug stores

Found in: Economy, Retail, Store Openings & Closings
Wednesday
August 23, 2006
3 Comments

Just the other day, I talked somewhat about the pharmaceutical retail industry in New Jersey. In a word, it’s crowded. Like I said the other day, before I even take a look at the local, Mom & Pop pharmacies, I’ve got a CVS, two Eckerds, Drug Fair, Rite Aid, Walgreens, and a Target Pharmacy. Add in the local pharmacies and a couple of supermarkets, it’s a crowded enviroment. A crowded enviroment which is now about to get smaller as reports are that Rite Aid is in discussions to buy Eckerd & Brooks drug stores.

Under terms being discussed, Rite Aid would pay about $1.5 billion in cash, with the rest in stock, The Wall Street Journal reported on its Web site Wednesday night, citing two people familiar with the matter.

The deal would add about 1,800 stores to Rite Aid’s existing 3,300 locations, making Rite Aid a stronger rival to Walgreen Co. and CVS Corp. There are currently 6,171 CVS stores and 5,401 Walgreen stores, according to the companies’ Web sites.

Brooks has about 330 locations in New England and New York.

What does this mean? It gives Rite Aid a leg up and moves itself up the food chain, allowing the retailer to compete better with Walgreens and CVS. I also don’t think this will be the last consolidation-type move within this industry. As consolidation has swept other segments of the retail industry, pharmaceutical retail is not immune and I think that some of the bigger players in the field will be buying up more regional chains over the next few years.

Sidenote – does Rite Aid have the best NYSE stock symbol, RAD, or what?

More coverage from Marketwatch.

Related: last week, Chain Store Age Blog had a funny piece about Walgreens in Lincoln, Nebraska: Walgreens Ahead, and Ahead, and Ahead.

New Jersey to establish prescription drug comparision website

Found in: Consumer Rights, New Jersey, Retail
Monday
August 21, 2006
1 Comment

The supermarket near my house rennovated part of the store last year and put in a pharmacy. Across the street is an Eckerd, one traffic light away is a Drug Fair, about a half mile away is a Rite-Aid, and maybe a mile and a half the other way is a CVS. Throw in a smattering of some other local pharmacies in the town and a Target with a pharmacy nearby. They all share one thing in common – they were all around before this supermarket put in it’s new pharmacy last year – and now, they’re all around after this failed experiment.

This weekend I went shopping and noticed the pharmacy shuttered with a sign saying that all prescriptions have been transferred to Drug Fair. “Due to business considerations”, the sign says the pharmacy has been closed.

running a pharmacy can’t be an easy thing – I’d imagine that there’s an outlay of at least $150k in payroll, minimum, per year. Maybe I’m off base and that number is much higher or much lower, but either way, I didn’t see this phamarcy doing very well. It’s not suprising that this one closed so soon.

But as one pharmacy closes, New Jersey pharmacies are about to undergo a radical change in the retail landscape as Governor Jon Corzine signed legislation that will establish a website allowing consumers to comparision shop for prescription drugs. From the AP:

Under the legislation, the Division of Consumer Affairs will establish and maintain a state prescription-drug retail-price registry that will be updated at least weekly. The Web site, which will be in English and Spanish, will allow visitors to comparison-shop for prescription drugs by name, dosage and ZIP code, the Governor’s Office said. The information will also be available on a toll-free hotline and at pharmacies in the state.

There is a similar website/service in New York (www.nyagrx.org) which reportedly has helped bring prescription drug prices down $17 per prescription.

As a resident in New Jersey, I’m really excited for this service. The Internet has long given consumers the ability to research products and shop for the best deal. As energy prices have risen, so have websites that allow you to find the best gas price in your neighborhood. Putting this kind of information out there, in a very accessable way, gives consumers the information they need to make smarter choices. I believe it also leads to better service, as everyone is now competing harder for the same dollar.

This change will be great for New Jersye consumers, but it will make a very competive retail enviroment even more cut-throat. If this spurs competition and drives prices down, how will pharmacuetical retailers like CVS and Eckerd react? Will this hurt local pharmacies more and give an edge to national chains?

If anyone has any information on how this has actually affected the pharmaceutical retail landscape in New York, and other states that have these comparision web sites, I’d be very interested in hearing about it.