retail news in context, analysis with attitude

The Wall Street Journal this morning reports that "hundreds of regional grocery stores in cities from Minneapolis to Seattle are closing or selling pharmacy counters, which have been struggling as consumers make fewer trips to fill prescriptions and big drugstore chains tighten their grip on the U.S. market."

The regional chains, the story says, "are too small to wrest competitive reimbursement rates on drugs, they aren’t connected to big medical networks or insurers, and they generally lack walk-in clinics and other health services that draw many customers to CVS and Walgreens locations."

In addition, "Consumers are increasingly getting 90-day supplies of their medicines or getting prescriptions delivered in the mail. Those trends are resulting in a decline in foot traffic to supermarket pharmacies, which were typically located at the back of stores. Meantime, profits are ever harder to come by as the health-care industry consolidates."
KC's View:
I totally get the economic motivations for closing down pharmacies. Even when they were being opened, I remember execs telling me how pharmacies took the longest of store departments to become profitable, but were worth the wait because they created a different kind of bond between shopper and store.

When stores close down their pharmacies, they need to find new and different ways to create and sustain those bonds. The prescription for success is better connections and strong differentiation … not just paring away the stuff that doesn't work.