Walgreens to acquire Brookshire Grocery's pharmacy operations

[storewanderer]

Is there a list somewhere of pharmacies remaining in store vs. pharmacies closing?

I went into a store with a closing pharmacy and the nearest Walgreens was just 1.5 miles away but near the local Wal Mart.

The store already didn't appear to be doing very well based on the condition of its meat and produce and lack of customers. I guess they do better with captive customer base type locations. This chain would have been a great buy for the CA Safeway chain.

This will hurt this chain.

[wnetmacman]

Is there a list somewhere of pharmacies remaining in store vs. pharmacies closing?

I went into a store with a closing pharmacy and the nearest Walgreens was just 1.5 miles away but near the local Wal Mart.

The store already didn't appear to be doing very well based on the condition of its meat and produce and lack of customers. I guess they do better with captive customer base type locations. This chain would have been a great buy for the CA Safeway chain.

This will hurt this chain.

I don't think it will.

Brookshire has long operated its pharmacy as a loss leader, even in its namesake Brookshire's stores. Most stores with a pharmacy don't do a large business with it; that's why they want out. My closest store was by itself for the first 5 years; even then, there are two locally owned pharmacies that wipe the floor with it on their abbreviated hours.

A larger number of the stores now don't have a pharmacy than before. Brookshire only operates 200 stores - 50 Super 1, 28 Spring Market, 11 Reasor, two Fresh by Brookshire and the rest Brookshire's. No Spring Market has a pharmacy. About 3-5 of the Super 1 stores do not either due to lease or space concerns. Both Fresh have one. That means that only about half of the Brookshire stores have one. Having said all of that, I do not see this as a concern. They'll get the lease money from Walgreens that will probably be far more than what they would have gotten with the lack of profits.

[storewanderer]

Is there a list somewhere of pharmacies remaining in store vs. pharmacies closing?

This will hurt this chain.

I don't think it will.

Brookshire has long operated its pharmacy as a loss leader, even in its namesake Brookshire's stores. Most stores with a pharmacy don't do a large business with it; that's why they want out. My closest store was by itself for the first 5 years; even then, there are two locally owned pharmacies that wipe the floor with it on their abbreviated hours.

A larger number of the stores now don't have a pharmacy than before. Brookshire only operates 200 stores - 50 Super 1, 28 Spring Market, 11 Reasor, two Fresh by Brookshire and the rest Brookshire's. No Spring Market has a pharmacy. About 3-5 of the Super 1 stores do not either due to lease or space concerns. Both Fresh have one. That means that only about half of the Brookshire stores have one. Having said all of that, I do not see this as a concern. They'll get the lease money from Walgreens that will probably be far more than what they would have gotten with the lack of profits.

In the stores that Walgreens will continue to operate a pharmacy inside, I agree, this will not hurt them as there will still be a pharmacy inside the store to take care of customers. It may even draw in more customers depending on the insurance acceptance situation, Walgreens ability to better push other services, expand hours, etc. For instance I am pretty sure the CVS in Target does significantly more volume than the Target Pharmacy ever did due to CVS and its insurance situation.

My concern is for the stores that do not have pharmacy inside anymore after this move.

With Save Mart I have noticed a decline in their store traffic since they closed the pharmacies. I don't want to say it is a significant decline, but I think it might be in some cases. Half of the store is basically a dead empty space with nobody over there. I am not sure they are selling any OTC/HBA anymore at all because it seems like pharmacy customers were the ones buying those items. Keep in mind the stores in my area, former "Albertsons Sav-On combo stores" modeled after Jewel Osco in a Larry test, were not in shopping centers with another drug store in most cases and in multiple cases the Walgreens they transferred scripts to was 3+ miles away past multiple CVS/other grocers with pharmacy.

[Alpha8472]

The pharmacy drives OTC sales up. Customers ask pharmacists for advice constantly throughout the day. The pharmacist recommends many over the counter recommendations and customers are encouraged to buy these remedies. Most ailments can be treated by over the counter products. You don't need a Doctor's appointment for most problems.

Without a pharmacist, customers will not know what to buy, so they skip buying things and go to a store with a pharmacist for free advice.

They say pharmacies lose money. Some drugs are loss leaders, but customers shop in the rest of the store and buy many other items including OTC drug products. That more than makes up for the loss leaders.

With a pharmacy you don't have to stock money losing prescription drugs. You only order expensive drugs if customers ask for it. You have to manage your inventory and not stock items that insurances don't cover.

[storewanderer]

The pharmacy drives OTC sales up. Customers ask pharmacists for advice constantly throughout the day. The pharmacist recommends many over the counter recommendations and customers are encouraged to buy these remedies. Most ailments can be treated by over the counter products. You don't need a Doctor's appointment for most problems.

Without a pharmacist, customers will not know what to buy, so they skip buying things and go to a store with a pharmacist for free advice.

They say pharmacies lose money. Some drugs are loss leaders, but customers shop in the rest of the store and buy many other items including OTC drug products. That more than makes up for the loss leaders.

With a pharmacy you don't have to stock money losing prescription drugs. You only order expensive drugs if customers ask for it. You have to manage your inventory and not stock items that insurances don't cover.

And for retailers who keep a pharmacy in the store (even if they don't operate it themself), they still get the benefit of those OTC sales.

In the case of Save Mart I really feel they made a huge mistake. They drove customers out of their parking lot for pharmacy business and those customers looked elsewhere for groceries at the same time they went 3 miles away for a Walgreens for pharmacy (if it accepted their insurance.... which was another issue in Nevada...). This was a real mistake.

In many cases when Raleys closed pharmacy they moved prescriptions to a CVS, Rite Aid, or Walgreens in the same shopping center or within eyesight. There were a few locations where this was not the case but it wasn't many. This kept the customer "close" to Raleys while they were getting the prescription from some other party so it made it easier for the customer to stay connected to them for groceries.

It is about taking care of the customer. The customer may have gone to Save Mart for pharmacy once a month, but shopped the store once a week. Now that they got sent 3 miles away for pharmacy to a Walgreens, which is overcrowded with long lines and a terrible experience, but then in the middle of that they notice there is a Smiths, Raleys, whatever with a pharmacy still in the store, and they think gee, why don't I try their pharmacy? And then when they go there they will also see in the case of Smiths far lower prices and in the case of Raleys a nicer looking store/more compelling item mix at similar prices and say gee why don't I grocery shop at this place instead?

[wnetmacman]

My concern is for the stores that do not have pharmacy inside anymore after this move.

With Save Mart I have noticed a decline in their store traffic since they closed the pharmacies. I don't want to say it is a significant decline, but I think it might be in some cases. Half of the store is basically a dead empty space with nobody over there. I am not sure they are selling any OTC/HBA anymore at all because it seems like pharmacy customers were the ones buying those items. Keep in mind the stores in my area, former "Albertsons Sav-On combo stores" modeled after Jewel Osco in a Larry test, were not in shopping centers with another drug store in most cases and in multiple cases the Walgreens they transferred scripts to was 3+ miles away past multiple CVS/other grocers with pharmacy.

Let me stop you - Brookshire Grocery Co. is not Save Mart, or any other West Coast chain. BGC didn't start offering pharmacies until the mid 80s, and they still have not added them everywhere. In the mid 90s, they moved store 606 (Longview's original Super 1 Foods, and only the second one opened) a mile down the road to some property originally purchased for Super Saver Wholesale Warehouse, but by the time they bought it, SSWW had been sold to Walmart, and a Sam's was built elsewhere. Next door was tiny Drug Emporium, the 10 store TX/LA group's headquarters store. They placed a deed restriction over any pharmacies. When 606 was rebuilt, it did not get a pharmacy. Its business did not suffer by moving.

Brookshire did not begin operating its pharmacy departments itself until the mid to late 90s; this function was a late addition. It has always been a loss leader for them. Even more so, many of the older stores just don't have the space to have them any more. Those stores do not do a large HBA business at all.

I agree that there will be a slight loss of jobs where the stores duplicate, but BGC had cut the hours of the pharmacies such that it's not a huge loss, and with the shortage of certified pharmacy workers, they will easily find jobs.

[wnetmacman]

Looks like today is the final day for BGC Pharmacies throughout. All will close at 4PM today and open as Walgreens tomorrow. My local store has two storage trailers stored right outside the pharmacy; I'm guessing this is tools for the takeover.

[storewanderer]

I meant to ask before but is there a list somewhere that shows what stores Walgreens will operate a pharmacy inside?

[wnetmacman]

I meant to ask before but is there a list somewhere that shows what stores Walgreens will operate a pharmacy inside?

There is not an official list - there are a few BGC stores with a Walgreens close by, and I believe that will dictate the pharmacies they continue. For now, it appears to be all. I know Super 1 Foods in New Iberia has a Walgreens right across the street, so that store may not continue to have a pharmacy, but no official word has come down. I noticed a Walgreens banner on one of the Lafayette Super 1 Foods stores this morning.