15% RISE IN IN-STORE UNITS PROJECTED

CHICAGO -- The number of supermarket pharmacies is expected to grow 15% in 1994, according to "The Food Marketing Industry Speaks," a survey conducted by the Food Marketing Institute and released at FMI's annual convention here last month. More than three-quarters of responding companies said they plan to add or build in-store pharmacies in 1994.

000 to $25,000 for the middle 50% of pharmacies. The median number of prescriptions dispensed per day per pharmacy was 115, ranging from 90 to 186 prescriptions for the middle 50% of pharmacies.

Prescription sales as a percentage of total store sales averaged 4.8%.

The average retail prescription price was $26. The percentage of prescription sales from generic drugs was 35%.

Fully half of supermarket pharmacies operated by survey respondents are at the front of the store. Another 24% are on the side, 23% in the back and 3% in the center. The average size of the pharmacy is 450 square feet.

Average direct wages for pharmacists, excluding benefits, as a percentage of prescription sales ranged from 12% to 18% for the middle 50% of companies.

More than half (55%) of the companies said they use specific criteria, such as prescription or sales volume, to trigger the hiring of a third pharmacist. More (68%) use such criteria when hiring a pharmacy clerk or technician.

The most common criterion, cited by more than 70%, is the number of prescriptions filled per week. Typically, companies add a third pharmacist in a store when the number of prescriptions per week reaches 1,300. The median number of additional prescriptions for determining whether a clerk or technician should be hired is 500.

When a new pharmacy opens, retailers report that the median amount of prescription inventory is $60,000. In mature stores, the median inventory is $95,000. Among all companies participating in the survey, inventory in a mature store typically turns nine times a year.

Profitability of the pharmacy department, meanwhile, has eroded. The median gross margin was 25% in 1993, down from 29% in 1990. Average gross margin for third-party sales was 21%, compared with a margin of 28% for cash sales.

Indeed, pressure on profit margins was cited as the top challenge facing supermarket pharmacies. Tied for second place were pricing and staffing issues.

Contributing to the profitability squeeze was the dramatic increase in third-party plan prescriptions, which jumped to 48% of sales in 1993 from 30% in 1990.

The growth of third-party plan prescriptions has led more than half (56%) of respondents to employ a third-party prescription plan coordinator. A majority of pharmacies offer value-added services. Services most commonly provided are blood pressure machines, at 89% of pharmacies; computer-generated drug monographs, 76%; dedicated waiting area, 73%; separate counseling area or window, 61%.

Other services offered less frequently are: health fairs and screenings, 41% of pharmacies; delivery service, 21%; "brown bag" sessions, 19%; mail-order services, 18%; video-lending library, 17%; electronic patient information kiosk, 8%, and 24-hour pharmacy services, 4%.

Larger pharmacies are more likely to offer mail-order services, delivery services and video-lending libraries. Companies headquartered in the Central and Western states are more likely to offer mail-order service.

The survey found that only retail companies with total annual corporate sales in excess of $100 million warehouse their own prescription drugs. Copies of the report are available from FMI's publications department at (202) 429-8298. Prices for the report are $20 for members and $40 for nonmembers. The report and detailed tabluations are $30 for members and $60 for nonmembers.