ARROW SEEKS CHAINWIDE ROLLOUT OF NUTRITION CENTERS IN SHAW'S

JOEL ELSON

EAST BRIDGEWATER, Mass. -- Shaw's Supermarkets here is considering a rollout of combination pharmacy, vitamin and supplement centers following a successful two-store test of the concept in Bangor and Biddeford, Maine.

Expanding the combined pharmacy and nutritional-supplement departments to its other stores with pharmacies would position Shaw's to meet growing consumer demand for vitamins and supplements, as well as for information about the category, said Ed Mercadante, president and chief executive officer of Arrow Corp., Farmington, Conn., which manages or operates on a leased-space basis all 23 Shaw's pharmacy departments. The Maine test pharmacies are both leased-space units.

"More people are taking vitamins and nutritionals, and are seeking individuals with the expertise to give them advice on how to take them, especially in conjunction with traditional medicines," he said.

Mercadante said Arrow has submitted a proposal for a rollout of the departments, called Arrow Pharmacy and Nutrition Centers, to all Shaw's stores with pharmacies, and is awaiting approval from the retailer. A Shaw's official did not return a call for comment.

The revamp is part of a larger conversion taking place at all Arrow-run pharmacies nationwide. Arrow operates 68 pharmacies, some of which it owns, in hospitals and retail formats in Connecticut, Rhode Island, Massachusetts, Pennsylvania, Maine and Michigan. The company's pharmacies generated more than $80 million in sales and filled more than 3 million prescriptions last year.

"We are rapidly incorporating the [new] vitamin and nutritional lines into our merchandising mix, and expect to convert the balance of Arrow's traditional pharmacy locations over the next six months," Mercadante said.

Vitamin and supplement sales "have been terrific and run $100,000 to $200,000 on an annualized basis at other pharmacy locations Arrow manages," said Mercadante. He declined, however, to comment on specific figures at the two Shaw's test sites.

The test stores previously carried nutritional supplements in the pharmacy area. However, the departments were reconfigured last December after Arrow acquired a Maine company, Downeast Pharmacy, that had operated those pharmacies on a leased-space basis.

Arrow reduced the size of the departments, from 1,200 square feet to 1,000 square feet, and altered the product mix.

Now comprising 1,200 items, the vitamin, herb and homeopathic mix is priced from $5 to $15 and merchandised on seven tiers on a two-sided, 18-foot-long, freestanding island gondola.

Most customer transactions have been multiple purchases of about $21, Mercadante said, with gross profit margins in the 40% to 50% range.

The product assortment includes Arrow's private-label line, Natrul, as well as Twin Lab, Schiff, Natrol, Genisoy and Boiron. Professional product lines, available only through health care professionals, according to Arrow, are also displayed in the revamped pharmacy area.

These include PhtyoPharmica, Rx Vitamins, Health Care Naturals and Optimal Health.

At the test stores, specially trained pharmacists advise customers on supplements that would be best for their particular conditions and existing drug regimens -- suggesting a replenishing vitamin to counteract the depleting effect of a prescription drug, for example.

The new departments create a shopping experience that "is very similar to that of a health food store," said Mercadante.

"The concept is to create a location that sells very similar products, but that has a pharmacist who can offer clinical knowledge and help the patient pick the right product."