K-VA-T’s holistic method fuses health, Rx
Offering a holistic approach to health is the goal of K-VA-T Food City stores, integrating pharmacy, food and good living.
To this end, last spring the chain launched NuVal, a nutritional scoring system that helps consumers make better food choices. The system was launched in all stores, and according to Don Clark, VP pharmacy services, it’s doing very well.
“We feel a responsibility to the people who shop in our stores and eat the products they buy from us,” Clark said. “We felt NuVal made it easy for the customers to understand the nutritional content of the foods they eat.”
The pharmacy also is a vital part of Food City’s health-and-wellness plans, Clark said.
“Our pharmacist is always in our stores ready to answer questions on healthy living plans and helping patients with information not only on their medications, but also on the way they live and eat,” Clark explained.
Food City also has a registered dietitian and a nurse whose title is director of healthy initiatives, both of whom were hired with the goal of helping customers live a healthy lifestyle. Both have worked very closely with the NuVal system, as well as with local doctors and health centers.
“We want our customers to be healthy because healthy people live longer, and they’ll shop our stores for more time. We recognize that as a [corporate] citizen, we want to be the destination that people seek out, understanding that when they go to Food City, we have alternatives that will help them live a healthy lifestyle,” Clark pointed out.
Every one of Food City’s pharmacies also has a pharmacist who is registered to provide immunizations — anything from shingles to tetanus and flu vaccines — throughout the year.
Customers of Food City’s pharmacies can join a prescription discount club that offers $4 generics and discounts on around 5,000 drugs. It also allows customers to earn discounts on over-the-counter medications on select diabetic products. “It’s a real saver for people that don’t have insurance or are underinsured,” Clark said.
Pharmacy, makeover lifts Fred’s sales
Fred’s last year migrated its more than 300 pharmacies to a more convenient front-of-store position in an effort to boost pharmacy revenue — and it worked. Fred’s 2010 pharmacy sales growth of 4.8% outpaced the discounter’s overall sales growth of 3% for the year. At the time Fred’s began executing against the pharmacy makeover, the company reported that test stores featuring front-of-store pharmacies enjoyed 20% higher sales per square foot as compared with the company’s average.
Fred’s opened 21 new pharmacies throughout fiscal 2010 and plans additional pharmacy location growth of between 10 and 15 in 2011. “Pharmacy expansion not only enhances margins; it also serves as a proven driver of customer trips and loyalty,” Bruce Efird, Fred’s CEO, told analysts in March.
Fred’s pharmacy department also was successful in administering 7% more immunizations to patients in 2010 — that’s a build on top of the 17% increase in immunizations Fred’s realized in 2010 vs. 2009 because of H1N1.
Fred’s also will continue to emphasize the better merchandising mixes to come out of its Core 5 program, which is designed to highlight five strong trip-driving departments where Fred’s feels it has a marketable advantage over other small-box competitors — notably pharmacy, celebration and party, pet products, paper and chemical, and home products. By the end of 2010, Fred’s had roughly 30% of its store base in the Core 5 layout, which features improved merchandising, signage and adjacencies.
And while Fred’s projects flat comparable pharmacy sales across 2011 because of the number of branded pharmaceuticals losing patent protection and pharmacy reimbursement pressures on the average manufacturing price at the state level, Efird tabbed pharmacy as a key growth driver for Fred’s. “On average, stores with pharmacies have higher front-end traffic, consistently performing at 10% or better than stores without pharmacies,” he said.
Kerr expands health focus beyond stores
Kerr Drug describes its free prescription delivery service — launched in fall 2010 and renewed to positive customer response for 2011 — as “old school innovation.” If “old school” means anticipating consumers’ health and everyday-product needs, and meeting them with a down-home approach to store service and a broader-than-usual menu of pharmacy care options, then the tag could apply to Kerr’s entire business strategy.
The chain has pruned its retail network to a core group of 76 high-yield drug stores and a number of clinical pharmacies, all in North Carolina, as well as a combination specialty pharmacy and mail-order center in its home market of Raleigh. “We have fewer properties now, but all of them are excellent,” asserted Diane Eliezer, Kerr’s director of marketing.
After developing a groundbreaking array of retail health services offered through a variety of drug store formats, Kerr remains one of chain pharmacy’s most innovative retail health providers. With the launch last year of Kerr Health, a separate division devoted to providing clinical pharmacy and wellness services directly to employers, long-term care facilities and other entities, the company has broadened its health focus well beyond the drug store setting.
Ten Kerr stores still feature “an expanded clinical presence” ranging from “a clinical office that does screenings” to “a full Community Care Center,” Eliezer told Drug Store News. These days, however, the chain’s highly regarded clinical pharmacy team is “out of the store as much or more than they’re in,” she said, as they provide immunizations, health screenings and other services to business and community organizations through Kerr Health.
“Originally, we thought there would be much more of a retail application with that, but it turns out that has not grown as quickly as we’d hoped. But there’s a great deal of business … out of the store, as well as [medication therapy management] and immunizations in the store,” Eliezer explained.
Meanwhile, the chain maintains its pioneering approach to community-based health care. Kerr was the first drug chain, for instance, to launch ActiveCare’s ActiveOne PAL, or personal assistance link, a rapid-response system that links seniors via a one-touch cell phone link to emergency health providers.