Supermarkets blends Rx with whole-health, organic offerings

Supermarkets remain a potent force in pharmacy retailing, but the growth rate for prescription sales in food-drug combo stores lags behind that of all other trade channels except independent drug stores.

According to IMS Health, supermarket pharmacies rang up a modest 4.3 percent gain in total prescription revenues in 2006, to $28.8 billion. In terms of units, food-store pharmacies grew 2.2 percent last year, to 476 million total prescriptions dispensed.

That gave the food-store channel 11 percent of the U.S. total of 3.42 billion scripts dispensed.

One factor in the modest growth rate for supermarket pharmacies, IMS researchers point out, is that the pursuit of “natural” or organic-oriented food channels and whole-health alternatives—think the phenomenally successful Whole Foods and Trader Joes formats—has edged out somewhat more traditional supermarket offerings like pharmacy to some degree.

Nevertheless, the quest for a more seamless integration of pharmacy and “Whole Health” nutritional offerings under one roof remains a priority among food-store executives on both the pharmacy and food sides of the store. In the era of self-directed care, preventive health and the pursuit of healthier eating habits, food/drug combo store operators who successfully integrate the demand for healthier foods with the demand for both prescription drugs and health information at the pharmacy have struck a responsive chord with consumers.

“What’s important to understand is that pharmacy…gives us an opportunity to complete the total offering in nutrition and health in the store,” said Dave Fong, senior vice president of pharmacy for Safeway, at a recent industry seminar. He added that food-drug combo stores are benefiting from what he called “a nutritional revolution,” and that supermarket operators who can tap into that revolution will emerge as winners.

According to the Food Marketing Institute’s State of Food Retailing 2007 report, 72.4 percent of supermarket retailers now offer a natural or organic food aisle or section, and 46 percent are “branding their own organic foods, selling private label versions of these products.”

In addition, FMI reports, “Nine in 10 companies are featuring fresh seafood, delis, prepared takeout foods and aisles or sections devoted to ethnic offerings in new stores. At least half are including olive bars, sushi stations, pharmacies and a separate organic or natural food aisle or section.

“The number of supercenters and food-drug combination stores offering virtually all these features continues to increase, driven by consumer demand for one-stop shopping,” added the group in a report. “Retailers are building natural and organic stores for consumers concerned about health and wellness and gourmet outlets for high-income shoppers.”

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