Drug Stores Push Convenience

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Drug Stores Push Convenience

CHARLESTON, S.C. -- As the American population grows older, the number of chain drugstores grows bigger. It's no wonder considering that four out of every five patients leave their doctor's office with a prescription, according to a recent survey by the National Association of Chain Drug Stores (NACDS).

In addition, three billion prescriptions were written nationally in 2001. By the year 2006, that number will skyrocket to four billion, according to NACDS, reports The (S.C.) Post and Courier. Prescription sales at pharmacies nationwide this past year were $182.7 billion, an 11 percent increase from the year before.

Why the boom in the drugstore business? "It used to be if you were on medication all the time, people thought there was something wrong with you," said Laura Miller, a senior economist with NACDS, according to The Post and Courier. "Now it's socially acceptable."

Indeed, new medications have been approved to treat all sorts of diseases, everything from heart disease to exhaustion. "There are all these new drugs being introduced," and that has meant growing revenues for the industry, said Mike Deangelis, a spokesman for CVS, the nation's number-two pharmacy company.

"It's very common to see two or three drug chains on the corner of major intersections," said John Sensabaugh, vice president of strategic communications of Eckerd's. "Drug chains like Eckerd's and Walgreens like the convenience of the corner."

Walgreens, the biggest of the pharmacy retailers, is looking at building 20 additional stores in South Carolina over the next few years. "People would rather go to a stand-alone store," Miller said. "The parking's easier. Plus drive-through windows do attract more traffic. It's all about customer convenience."

Despite the weak economy, Walgreen's profits last year rose 17 percent. "Much of our growth is concentrated in states with a warm climate and with strong tourism," said Carol Hively, a Walgreens spokeswoman.

A lot of grocery store chains and mass retailers, meantime, are opening their own pharmacies. Harris Teeter recently announced it would close its West Ashley store because it wasn't large enough to add a pharmacy or other amenities. Bi-Lo has had a pharmacy in several of its stores here for years and so has Wal-Mart. Costco also has one.

Miller said it's too early to tell whether the grocery stores and mass retailers will put a big dent in the drugstores' business. "Only time will tell if we see big changes," she said.

To stay competitive, drugstore chains keep adding amenities as they expand, often adding magazines, cosmetics, soft drinks, beer and groceries. That's why Deangelis said CVS is building its new stores larger. While the old stores averaged 6,000 square feet, today they're well over 10,000 square feet. A typical Walgreens store is 14,500 square feet, which includes 11,000 square feet of sales area. It carries more than 20,000 items for sale in addition to prescription drugs. "It allows us to offer a larger selection of merchandise," he said.

As much as 80 percent of drugstore sales have nothing to do with pharmaceuticals. "People are in and out of our stores and back in their cars in eight minutes flat if they're not getting a prescription. Ten minutes if they are. Plus, it's on your way home," Walgreen's CEO David Bernauer told Business Week earlier this year.