Top Retailers

It could have been so much worse.

That conclusion, apparently, is what investors drew from Walgreens’ sales and earnings report for the second quarter ended Feb. 28. And it was enough to push the company’s stock price up sharply and burnish the investment outlook for other drug retailers: even Rite Aid’s stock price responded with a nice up-tick.

The retail pharmacy universe just got a little bit smaller.

Despite Drug Fair’s turnaround efforts in recent years, the regional player has fallen victim to the current economic crunch, filing for bankruptcy protection and agreeing to sell the majority of its assets to Walgreens.

In a week where too much was made of MinuteClinic’s seasonal closings, Take Care Health Systems’ announcement that it will focus on providing greater year-round services is not only a nod to the strong future of the clinic model and its further expansion, but also its expanded role in healthcare reform.

It also should be noted that Take Care Health continues to open up clinics at a very "Walgreens-like" clip; in fact, new clinic openings are announced nearly every day.

When one of the retail pharmacy industry’s best-known merchandising gurus is pulled away from the front end of the store and put in charge of purchasing and new cost-saving efficiency programs behind the pharmacy counter, you know big changes are afoot.

“I’m not willing to say it was a great move at this point.”—BusinessWeek Feb. 12, 2009.

That’s what Morningstar analyst Mitchell Corwin had to say about the 2007 merger that created the $76 billion healthcare goliath now known as CVS Caremark. He’s entitled to his opinion, but you have to believe there was probably a whole lot of people waiting to greet Columbus upon his return to remind him that despite his killer suntan, the world most definitely was still flat. And no amount of corn or cocoa would make them think otherwise.

A few months after San Francisco drug stores cleared their inventories of anything with tobacco, a city on the opposite side of the country passed a similar ban. Boston has banned tobacco sales in retail pharmacies as well, but its ban covers all stores that operate pharmacies, not just drug stores.

This full-page ad taken out by Walgreens is important as it comes at a time when healthcare reform is top of mind.

The ad serves as a call to action for healthcare providers, along with state and federal government, to work together to develop a high quality and affordable healthcare system. It also calls for payers, politicians and policy makers to recognize the value of an expanded role for retail-based clinics beyond simply acute care.

Pick an outside turnaround artist/corporate hotshot to lead the nation’s most storied drug store retailer? Forget it.