By  on April 27, 2007

SCOTTSDALE, Ariz. — Realizing there's more than prescriptions driving drugstore chains' growth, the newly appointed chairman of the National Association of Chain Drug Stores, David Bernauer, pledged to put a greater focus on the front of the store.

The term "front-end" refers to nonpharmacy categories sold within drugstores and encompasses beauty, which is one of the top three nonprescription departments in most drugstores. Attention to the nonprescription items has diminished over the past few years as pharmacy issues dogged operators, manufacturers and association heads.

"That's going to change. It has to," said Bernauer, who is the chairman of Walgreen Co., in his inaugural address as chairman Tuesday. "It's dollars and cents. Remember this: For all of us, the front-end is usually the first step in developing pharmacy customers." He pointed out that two-thirds of the sales volume done in chain drugstores comes from prescriptions, but a disproportionate share of the profits comes from front-end. "We'd be dead ducks without healthy sales of over-the-counter [items], cosmetics, photos, greeting cards and all that stuff we cram into our stores."

His thoughts about the important role of front-end categories were echoed by Steven C. Anderson, the newly installed president and chief executive officer of NACDS. In an interview with WWD, Anderson said he hopes to cement partnerships with other associations — including the Cosmetic, Toiletry, and Fragrance Association — to help the industry stay on top of beauty issues. "We have to think of the concept of the entire store and focus on front-end. We find it a natural to work with CTFA." The synergies between health and beauty continue to mandate that drugstores have a better handle on how to market these two departments in tandem.

Bernauer said NACDS has initiated a new product-launch collaboration to help reduce the number of new product failures. Another initiative will be a best-practices study on out-of-stocks.

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