‘Get what you pay for?’ You bet
WHAT IT MEANS AND WHY IT’S IMPORTANT — It’s kind of refreshing to find that the old adage “you get what you pay for” still holds true.
(THE NEWS: Shoppers would spend more for good customer service, survey finds. For the full story, click here)
Customer service is one of those labor cost line items that some retailers view as a controllable expenditure, while others see it as an investment. You often can distinguish one from the other as soon as you walk through the door — if you feel good about where you are, that retailer probably sees customer service as an investment.
Now these investment-minded retailers know there’s a return to be had — to the tune of the 13% premium that most Americans are willing to pay extra for that feel-good shopping vibe.
The news is not new to the retail pharmacy industry, however, given the amount of recognition McKesson’s Health Mart has received of late around exemplary customer service. In the May issue of Consumer Reports, a report found that such independents as McKesson’s Health Mart franchise group serve as a good example of the kind of experience patients are in search of. Health Mart also has been recognized for its outstanding service elsewhere. J.D. Power in February named Health Mart as 1-of-the-40 companies that was a J.D. Power 2011 Customer Service Champion.
Giant Eagle highlights fresh produce
PITTSBURGH — Giant Eagle is celebrating its locally and regionally grown produce with a new video on its website.
The retailer said that it is taking several steps to educate consumers on which fruits and vegetables are at their peak season throughout the year, and is further relaying this message through its video, which can be viewed on the company’s website.
“What we’ve found is that our customers associate in-season produce with peak freshness, better value and environmental consciousness,” Giant Eagle VP produce Craig Ignatz said. “No matter where it’s from — a local farm or the far side of the globe — we ask ourselves the same questions every day: how fast can we get it to our customers, and how fresh can it be?”
Ignatz also said that depending on the season, the produce Giant Eagle offers won’t necessarily be from our region, but may come from farther away where climate and growing conditions are ideal.
According to Giant Eagle, its customers annually consume:
56 million lbs. of bananas;
11 million lbs. of strawberries;
17 million ears of corn; and
Nearly 17 million lbs. of Idaho potatoes.
For information about Giant Eagle’s produce sourcing efforts, watch the video here.
Merlo lets everyone know why PBM isn’t going anywhere
WHAT IT MEANS AND WHY IT’S IMPORTANT — With all the talk among the investment community and press about what CVS Caremark should do with its PBM business, it really comes as little surprise that president and CEO Larry Merlo hit the topic head on during Thursday’s first-quarter conference call — insisting that there are no plans to split the company.
(THE NEWS: CVS off to ‘good start,’ Merlo says; company committed to PBM biz. For the full story, click here)
Merlo told analysts at the start of the conference call, "Despite conjecture in the marketplace, there are no plans to split up the company. We strongly believe that we have the right assets in place to ensure our long-term success in this changing healthcare environment."
Merlo’s comments came on the heels of much chatter among the investment community and press about whether or not CVS Caremark should spin off the PBM business. And some critics have argued that the two divisions of the company are worth more apart than together.
However, those who insist that CVS Caremark’s parts are worth more than their sum should take a closer a look at how the various parts of the company’s integrated model come together — retail, mail order, PBM, specialty and retail clinics. Each component complements the others, and the PBM is a big part.
Echoing this sentiment, J.P. Morgan issued a report in March — on the fourth anniversary of the CVS Caremark merger — that stated: "In our view, the strategy behind the merger is not inherently flawed, and we believe that Caremark has proven to be a valued asset to the retail pharmacy operation. As such, we think it is unlikely the company would voluntarily spin off the Caremark asset in the near term. That said, while some have argued in favor of separating the two companies to unlock value, we note that a sale would likely have sizeable FTC concerns, while a spin has the potential for negative synergies on both segments."