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SIOUX FALLS, S.D. — Lewis Drug is getting ready to open its 50th store, which will mark a milestone for the regional pharmacy chain.
The outlet, formerly an independent pharmacy, is located rural Clear Lake, S.D., and will get upgraded systems and a fresh look. The front end will get Lewis’ curated assortment of health and beauty aids and consumables.
“It’s a goal we’ve aspired to, and we’re there. So we’re excited about that,” comments president and chief executive officer Mark Griffin.
The independent store’s staff, including the pharmacist-owner, can stay on as long as they like, he says. “We would rather, when making acquisitions, leave people in place. Especially in rural areas, it’s important to see a familiar face behind the counter.”
Lewis tells sellers that an acquisition can take away their headaches and leave them employed, Griffin says. “It’s worked out very well for us.”
Lewis, which has 49 drug stores in South Dakota, Iowa and Minnesota, is also enthused about the prospects for openings in downtown Sioux Falls.Griffin notes that the chain originated 74 years ago with a 7,000-square-foot store in the heart of the city that grew its business to $1 million in 1964.
“That’s quite a bit of business for that footprint in today’s dollars,” he says. “Now it’s back to the future. We’re looking downtown because the Millennials and even the baby boomers — for different reasons — are relocating in urban areas. Sioux Falls really doesn’t have a bodega, so to speak, with a pharmacy.”
Mark Griffin, Lewis Drug
The plan for such stores would be to have limited groceries, wine and spirits along with H&BAs and a prescription counter.
Lewis, which is also adept at operating large stores, plans as well in the next year and a half to open a 40,000-square-foot outlet on 7 acres it owns on the outskirts of Sioux Falls. Development that sprang up around the site makes it ideal for the chain’s seventh large store in the city, with possibly an adjacent clinic and McDonald’s or Burger King.
“You need to expand out, around the perimeter,” Griffin remarks.
Chainwide, the retailer remains focused on the general merchandise that differentiates it from national players. Weather is tricky in the area, and Sioux Falls was hit with six inches of heavy, wet snow in late March, even as Lewis was putting up outdoor garden centers. On the positive side, Griffin said the unseasonable snow would help the chain clear out its inventory of snow blowers. Unseasonable snow in November had created unprecedented early demand for the blowers, he noted, forcing it to reorder machines.
With snow blowers and lawn mowers, the goal is to sell out before the “might as wells” — the customers who tell themselves “might as well wait til next year” — crimp sales, Griffin said. The might-as-wells come into play for snow blowers around January 15, and for lawn mowers around July 1.
Also in the merchandising arena, Lewis is building on its newfound strength in pet care, healthful food and beauty products. Organic and gluten-free food items are being tied to the pharmacy “because they marry well,” Griffin pointed out. Pharmacist recommendations reinforce the appeal that such products have gained in the popular culture, he says.
Larger Lewis outlets almost have a “grocery flavor,” he notes, saying they have the space for extensive assortments of better-for-you consumables.
In the electronics area, the chain has tapped into demand for personal devices. It has cut back on 60-inch flat-screen TVs, other than with promotional items for holidays. It is finding success instead with tablet-size products and accessories. Wireless chargers, headphones and speakers are the next wave, says Griffin.
A source of strength for Lewis is the economy in the region, where the unemployment rate for Sioux Falls’ population of 250,000 is 2.6%. Health care, financial services, retailing and agriculture are bolstering the entire Upper Plains region, says Griffin. “It’s a healthy mix,” he comments.
He says he is cautiously optimistic about the short term, while noting that the impact of the presidential election on consumer confidence remains to be seen.
Besides the pursuit of the White House, there is also the campaign for Congress, he adds. Because many candidates will be concentrating on getting reelected, he foresees no new major laws affecting the industry.
