By David Pinto
Many of the people who toil in the chain drug store industry make the understandable error of blaming the National Association of Chain Drug Stores for the struggles the industry is currently enduring. While the accusation is understandable, it is by no means accurate — or fair.
Chain drug retailing in America has been in decline for some considerable time. Many factors must share the blame — but NACDS is not among them.
Here, in no particular order, are three primary culprits:
• A decline in the quality of leadership within the nation’s most important drug chains. Once upon a time, when the chain drug retail community was characterized by the success of its members, the NACDS Annual Meeting was the time and place to celebrate that success. To mark the occasion, the industry’s crown princes gathered — usually but not always in southern Florida — to acknowledge and rejoice in the industry’s success. Everyone came — Fantle, Panasci, Harrison, Dworkin, Grass, Eckerd, Turley, Heller, Levin, Pessina, Skaggs and others too numerous to name. Not because they had to but because they wanted to. It was, after all, their industry, and they deserved to be there. Where are their replacements today? We don’t even know all their names.
• A decline in supplier interest and attendance. Once upon a time, where the retailers gathered the suppliers followed. Not because they had to but because they wanted to. Each day at the Annual Meeting offered a wealth of meetings, private sessions, individual top-to-top conferences and conversations. Business was routinely conducted, key decisions routinely arrived at, important announcements routinely forthcoming. Where are those suppliers today? And where are their senior managers? They have other, important places to go. And besides, they’re not terribly interested in meeting the current crop of chain drug executives.
• A serious decline in the positive excitement once routinely generated in the chain drug community. Today, the news is all about store closings, Chapter 11 declarations, senior management changes, retailers who no longer find the Annual Meeting of value. Indeed, the genuine excitement in today’s chain drug community is generated not by the major retailers but by the regional players, a group once consigned to a supporting role, overshadowed by the major drug chains and the people who ran them. As a brief quiz, has anyone met the CEO of Walgreens? Does anyone know the CEO of Rite Aid? Can anyone identify the president of CVS — or name the last CVS president to attend the Annual Meeting? (No, it was not Larry Merlo or Tom Ryan or Chris Bodine. It was …)
One could go on and on. Has NACDS lost a step or two? Certainly. It’s tough to play to a half-empty house. Has pharmacy gained in prominence at the expense of front-of-store merchandise categories? Yes. Pharmacy remains characterized by a commitment often lacking in front-store categories. Will Jim Whitman’s upcoming departure hurt the association? Absolutely. People of Whitman’s capability don’t often come along.
So much for the issues. What are the solutions? That’s a tougher challenge. Should NACDS change? Probably. Should the association reevaluate some of its priorities? Possibly. Should the Annual Meeting be restructured or repurposed? Absolutely not. The value is still there — if only the industry leaders, both retailers and suppliers, took off their blinders long enough to see and capitalize on it.
To close, we would do well to recall the words of that English storyteller: “The fault lies not with our stars but with ourselves.”
