Inside This Issue - Opinion
Best regional drug chains capable of competing
November 11th, 2013
by David Pinto
The disappearance of Kerr Drug, one of America’s elite regional drug chains, has yet to be felt. But with Walgreens closing its acquisition of the 76-store, Raleigh, N.C.-based retailer, the result is that there will be one fewer regional drug chain offering competition, color, excitement and diversity to an industry increasingly dominated by Walgreens, CVS and Rite Aid.
What’s sad about this event is not necessarily the sales impact. Kerr, with estimated revenues of $694 million, is not significant in terms of the volume it produces. Rather, the loss to chain drug retailing will be most dramatically felt in the loss of people.
Historically, America’s regional drug chains have produced the most interesting, innovative and appealing people in the industry, people who clearly relish their work and enjoy the people, both competitors and suppliers, with whom they come into contact. This is especially true of Kerr Drug, a drug chain known and respected throughout the industry primarily because of the character and content of its employees.
Much has already been written here about Tony Civello, the architect of the modern Kerr drug chain, the man who assembled the company and has led it for the past 17 years. His departure will likely — assuming he doesn’t succumb to any of the enticing offers now crowding his calendar and telephone line — create a void in chain drug retailing that cannot be easily or adequately filled. To reiterate sentiments previously expressed, his leadership skills and personal magnetism simply cannot be replaced.
Others at Kerr — Bill Baxley, Ralph Petri and Mark Gregory — will also be missed, simply because they display the same openness and eagerness to communicate and do business personified by Civello.
A widespread feeling within the chain drug industry is that the sale of Kerr Drug may open the floodgates, as other regional operators, sensing that Civello, always ahead of the curve, is merely anticipating the inevitable, determine that now is the time to withdraw from the business.
The feeling here, however, is that the strongest regionals are more than capable of continuing to compete effectively in an industry where bigness does not necessarily translate into superior performance.
That said, here are five regional drug chains capable of competing in any environment:
• Bartell Drugs — One of the last surviving drug chains on the West Coast, Bartell just opened a new-generation drug store that is the equal of anything this industry has produced in a long time. It’s worth the trip to Seattle to see why this drug chain remains a leader in the Seattle market.
• Lewis Drug — No drug store more successfully combines core drug store merchandise with so diverse and dramatic a selection of general merchandise as does Lewis. Its stores more than justify a trip to the upper Midwest, and Lewis CEO Mark Griffin, like so many regional operators, welcomes visitors.
• Kinney Drugs — The tendency is to overlook Kinney, mostly because of its location in upstate New York. Indeed, for many industry people, a trip to Seattle is easier and less time-consuming than the trek to Gouverneur, N.Y. But that doesn’t mean that Kinney should be missed. What Bartell is to Seattle, Kinney is to New York’s northern regions — and the welcome, typical of regional drug chains, is just as friendly.
• Navarro Discount Pharmacy — This Miami-based drug chain is among the very small list of retailers that successfully markets to an ethnic community, in this case South Florida’s Cuban population. Not surprisingly, considering that the drug chain was founded by Cubans. Here again, to study what chain drug retailing should and could be, a trip to Navarro is a first stop.
• Thrifty White Pharmacy — Here, nestled in the upper Midwest — its stores can be found in Minnesota, North Dakota and several other states in that region — is a drug chain that still successfully practices the art and science of pharmacy. The gateway to this retailer is Minneapolis — a city, by the way, that’s also a pathway to Sioux Falls, S.D. (home of Lewis Drug) and, some distance further, to Seattle, home of Bartell.
None of this means that Kerr Drug will be quickly forgotten or dismissed. But time dims the memory. Who, after all, still recalls May’s Drug or Happy Harry’s? And chain drug retailing moves on.
So the time has come to appreciate anew those regional drug chains that remain — while stopping a moment to appreciate Tony Civello, Bill Baxley and the other Kerr staffers who have given so much to chain drug retailing.