NEW YORK — Food and beverage sales are thriving at drug chains as operators continue to stretch the bounds of their offerings with new segments and presentations.
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The Fresh Day Cafe at Rite Aid’s recently remodeled store in Beverly Hills, Calif. |
Rite Aid Corp.’s remodeled unit in Beverly Hills, Calif., for example, features a Fresh Day Cafe and patio area, which has its own entrance and serves coffee, pastries, breakfast sandwiches and the chain’s private label Thrifty Ice Cream.
The store also houses a spacious wine, spirits and beer department, including premium wine selections and a “pick a six” bottle beer display, in which customers can assemble a variety six-pack.
And as one of Rite Aid’s “wellness stores,” the Beverly Hills outlet also provides an expanded selection of healthier foods, including natural, organic and gluten-free offerings.
Rite Aid president and chief operating officer Ken Martindale said at the outset of summer that the wellness stores “continue to outperform the rest of the chain in terms of same-store front-end sales.” He added during a conference call discussing quarterly results, “We continue to push the envelope in leveraging these stores to launch and expand innovative merchandising solutions.”
Rite Aid has also launched the nutritional labeling system “to help shoppers easily find food items that are a better fit for their wellness needs,” noted Martindale.
Chairman and chief executive officer John Standley said during the call that the chain is growing the footprint in the front end in areas that support a healthy lifestyle, including “better-for-you foods.”
Meanwhile, Walgreen Co. pursues “competitive convenience” with its offering of consumables and related products, Moe Alkemade, group vice president of consumables, sundries and seasonal, said this year. The idea is to leverage the chain’s’ ability to get shoppers in and out quickly at 8,200 small stores, saving them the time and hassle of shopping at big boxes.
Walgreens’ extensive presence also lets it cater its food and beverage mix to local tastes. The company’s relatively recent emphasis on fresh food is part of its effort to satisfy local preferences, especially with ethnic offerings. While the retailer sells milk, eggs and cheese chainwide, an outlet with fresh offerings might also have cut fruit, cut vegetables, prepared sandwiches and extra yogurt.
One case of tailored marketing is at an outlet in Las Vegas, that has a broad assortment of breakfast items and other food products that it heats up on demand for tourists. But the concept may not work elsewhere, because not many other stores would have the necessary traffic for it.
Broadening the consumables mix has proven especially successful in so-called food deserts — generally urban areas lacking a full-service supermarket. Walgreens counters the problem with “food oasis” models with expanded grocery assortments, including frozen food.
The retailer stocks frozen pizza chainwide, with regional variations, and some of its better-selling private label items include such frozen food items as chicken fingers. “But it’s very selective depending on where we are,” Alkemade noted. Ice cream is another major offering and dominates the chain’s freezer space, he adds.
For its part, CVS/pharmacy has kicked off a shelf-tagging program called Fit Choices, that takes the guesswork out of finding healthier options throughout the consumables department.
Fit Choices tags allow customers to find items that suit their individual dietary needs, organized in four categories: Heart Healthy, Sugar Free, Gluten Free and Organic. Products that are tagged “Organic” contain at least 95% organically produced ingredients and carry the USDA Organic seal on packaging, while items low in saturated fat and cholesterol are listed as “Heart Healthy,” as these items may reduce the risk of heart disease.
Brightly colored signage highlights the ease of making healthier food choices and allows shoppers to select the appropriate item without having to decipher complex labels.
The effort complements CVS’ elimination of cigarettes and other tobacco products this fall, reinforcing the company’s commitment to helping people on the path to better health.
Among smaller chains, Navarro Discount Pharmacy — now part of CVS — has found success with its private label Vida Mia groceries. South Florida-based Navarro in 2014 marked the two-year anniversary of the launch of Vida Mia, citing increasing acceptance of the line in projecting 4% annual sales growth for it for the next one to three years.
Vida Mia (My Life) — believed to be the nation’s first brand targeting Hispanics across various categories — has sold more than 7 million products encompassing about 1,000 SKUs. Its grocery subset, Mi Sabor (Taste), comprises coffee, plantain chips, cookies, rice and sugar, among other food products and beverages.
Accolades for the line have included Salute to Excellence Awards from the Private Label Manufacturers Association for Vida Mia Café Expression in the hot beverages category, and for Vida Mia Mojo Marinade in the dressings/oils/marinades category.
