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Changes within the executive ranks in the chain drug industry are coming at a faster pace these days than at any time in the industry’s history.
Most recently, Walgreens announced a new chief merchant, as a former Sam’s Club merchant, Linda Filler, was appointed to fill a position that was once held by Vern Brunner and most recently was Bryan Pugh’s responsibility. It would be difficult to overstate the dramatic implications of such a move, especially at a retailer like Walgreens, where senior executives have traditionally been developed from inside the organization.
Speaking of Walgreens, that retailer’s president is currently Alex Gourlay, a man virtually unknown on these shores a year ago, at which time he was running the U.K.-based Boots drug chain, a Walgreens unit.
Sprinkled throughout Walgreens are executives who learned the retail business at other organizations, joining the Chicago-based drug chain only after reaching maturity and prominence elsewhere.
If you’d rather look at CVS/pharmacy, that retailer’s president is Helena Foulkes, a woman who, though having grown up in the organization, was passed over for its presidency just three years ago in favor of an outsider who grew up in the department store business. That individual, it might be noted, had a difficult time learning his way around chain drug retailing — which is, after all, a much different business than department or general merchandise retailing — while Foulkes has dazzled the industry with the ease and efficiency with which she has embraced her new role.
The chief merchant at CVS/pharmacy is Judy Sansone, who has not held that title long. Rather, the person who preceded her, Mike Bloom, was CVS’ chief merchant for as long as most industry people can recall. His departure, to assume the presidency of the Family Dollar “value” chain, stunned the chain drug industry, so accustomed had that industry become to dealing with and through Bloom.
A closer look at CVS/pharmacy reveals other newcomers as well. There’s a new head of beauty care, and there are several other key merchants, while many long-timers no longer occupy the positions in which they had grown up. In short, new faces abound at a retailer that had become known for permanence in its staff, permanence accompanied by efficiency.
At Rite Aid, the changes have been more gradual. Still, that retailer’s senior executives are hardly people who have grown up in Camp Hill, Pa. The founding family is long gone — while the top managers who preceded the current leaders have also passed into history. Most notably, Mary Sammons, the woman credited by many as the executive who righted that sometimes troubled retailer, is now a continent away from Pennsylvania, while Bob Miller, the executive others view as Rite Aid’s savior, is now poised to run America’s No. 2 supermarket retailer.
The question, however, is this: How have these changes affected the nation’s three largest drug chains? And what will the impact be going forward?
These are not easy questions to answer. At the recent year-end meetings in New York City convened by the National Association of Chain Drug Stores, all three drug chains were very much present, as were many of their new leaders. Moreover, the mood was, as always at these events, generally convivial, and the Christmas selling season forecasts cautiously optimistic.
Still, it must be noted that the three drug chains, mirroring the rest of the mass retailing industry, are approaching Christmas with caution. The economy, the strange weather, the absence of compelling merchandise, the rush to blanket the season with more than the usual number of compelling price opportunities, the blurring of the Black Friday weekend activities into the broader selling season, and, not incidentally, CVS’ recent decision to stop selling tobacco — all of these happenings crowded in one upon another to make forecasting difficult at best.
Perhaps more daunting still, Christmas has become less important as a barometer of success for chain drug retailing as time has passed. It is certainly not the compelling measurement of performance it once was, and not nearly as critical to overall results as the event is to, say, the discount store business.
Indeed, the general feeling as the holiday approaches is that chain drug retailing will perform adequately, if not spectacularly.
The larger question is this: Is this retailing segment, largely remade by its new faces, as powerful going forward as it has been in its storied and very successful past? That, unfortunately, is a more difficult question to answer, even though the answer, when it comes, will largely determine the future of chain drug retailing in America — and elsewhere.
