Health Mart, more than 2,000 strong, building franchise’s drawing power

Health Mart
President: Tim Canning
Corp. Offices: San Francisco
Number of Members/Stores: 2,000
Web page: www.healthmart.com

In late 2008, retail pharmacy’s fastest-growing franchise for independent owner-operators blew past a significant milestone with the addition of its 2,000th drug store member.

Owned and operated by McKesson Corp., Health Mart has staged an impressive, coast-to-coast rollout since its relaunch in June 2006, growing more than 500% and emerging as a nationally recognized pharmacy brand. The concept is appealing both to customers drawn to the personal care provided by its independent pharmacist owners and to the owners themselves.

Customers are giving the concept high ranks for personalized service, rating Health Mart No. 1 in overall pharmacy customer satisfaction in the 2008 WilsonRx Pharmacy Satisfaction Survey from Boehringer Ingelheim Pharmaceuticals. And hard-pressed independent drug store owners who buy into the concept are looking to membership in a franchise network backed by McKesson’s deep pockets, merchandising expertise and business resources. In a time of economic peril, particularly, they’re looking to the concept as a way to bolster their business amid blistering competition from chain pharmacy retailers.

Health Mart president Tim Canning said McKesson projects continued growth for the franchise, but he indicated the focus has shifted to boosting store services and capabilities for the existing store network.

“We want to make sure we’re adding the right stores to our Health Mart base,” Canning said. The strategy, he added, is “to present a cohesive network of pharmacies that comply with the Health Mart vision, and that will engage with their patients.

“Our growth continues: we’re over 2,000 stores now, and we’re one of the major national pharmacies,” he told Drug Store News. “Now we’re starting to focus on helping our stores, as their business is challenged, and trying to empower them to be successful across three fundamental business principles.”

Those principles, said Canning, are simply stated: “To help them attract new customers, maximize existing customers already in the store and enhance their business efficiency.”

Along those lines, said Health Mart’s president, McKesson’s Reimbursement Advantage program, an automated reimbursement optimization system, can help level the playing field with big chain retailers and help keep independent pharmacies in the game. “In this environment, those types of things are more critically important to an independent business operator,” he said. “We have almost 800 Health Mart stores on it right now, and it’s the industry’s most comprehensive reimbursement optimization package.”

The system can increase a pharmacy’s net profit by an average of $1,250 a month, Canning asserted.

McKesson also provides such financial services as automated claims resubmission and pricing and profitability analytics, as well as customer care services and other tools.

Health Mart also is expanding its Diabetes Life Center, an in-store merchandising concept exclusive to Health Mart stores. The merchandising and marketing concept ties together a broad array of products and gives them a high profile, clearly identified home within the drug store.

The Diabetes Life Center is open to any Health Mart franchisee for a one-time fee of $300. In return for that fee, stores can draw on a variety of tools to market more effectively to diabetics.

The Diabetes Life Center resources include professional merchandising support, such as planograms and promotions; marketing support, with a consumer Web site and an online marketing toolkit; department signage; access to a broad selection of glucose-testing supplies and OTC products; a quarterly newsletter for patients called Take Control: Diabetes; brochures and literature from suppliers; and other aids.

“Being able to serve the diabetic patient is so important to community pharmacy,” Canning said. “This is a way of attracting new diabetic customers in your area, letting them know the Health Mart pharmacy is a place to go to for care.”

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