Drugstores Corner Houston Market

HOUSTON -- Three national drugstore chains are aggressively expanding in the Houston market and competing to stake their claims on the best remaining locations in an already saturated area.

Extreme competition hasn't slowed down Woonsocket, R.I.-based CVS Corp., which plans to open 25 to 30 new stores in the Houston area each year for the next several years. Meanwhile, Walgreens Co. currently has land for 24 new Walgreens stores under contract in the area, and Eckerd Corp. plans to relocate or open 36 stores in the area over the next three years, reports the Houston Business Journal.

Competition to acquire the best locations is stiff among the convenience-driven stores, which don't seem to mind operating in each other's back yards. Scott Shillings, vice president of retail services for Staubach Co., who represents CVS in acquisitions, says the drugstores often compete for the same sites.

While Clearwater, Fla.-based Eckerd has the longest history in the area, Walgreens and CVS are busy buying up sites to increase their market shares. Those sites are often in close proximity to their competitors. After just two years in the market, CVS has 30 stores open or under construction here.

Shillings points out that drugstores are not only growing in number, but the newer stores are also growing in size. Older stores, which were mostly inline, typically spanned between 8,000 and 10,000 square feet. Today, most drugstores operated by the major players are free-standing and encompass between 12,000 and 15,000 square feet, according to Shillings.

"It's getting complicated to secure the land because most sites require the assemblage of two or three pieces of land to build a drugstore," he said. "You may have to buy a gas station and the business next door in order to build a drugstore."

CVS spokesman Mike DeAngelis says convenience and visibility are important in the industry, so the company is scouting areas that are highly populated and easy to access. He adds that it is sometimes a challenge to secure locations because competitors are after the same type of spaces.

Meanwhile, with 135 stores in the area and 24 new locations under contract, Walgreens also hopes to boost its presence in the Houston market, says spokeswoman Carol Hively.

"A key to our success has been our ability to choose the very best locations," said Hively. "We have had a long-range growth plan in place for Texas for years, and Houston is part of that long-range strategy."

Meanwhile, Eckerd, which has been in the market since 1971 and has 106 stores in the Houston area, considers Houston one of its major markets. The company is concentrating its efforts on relocating and expanding in an effort to boost sales.