Blurring Channels: Supermarkets vs. Drug Stores

Supermarkets and drug stores have borrowed from each other’s playbook for some time now. You can walk into both and get a prescription filled, get a flu shot, grab a snack or even a fresh-made sandwich. The Duane Reade down the street from our offices here so strongly emphasizes the food offerings on its first floor that, if they covered over the company logo, I’m sure most people would think they’d wandered into a grocery store.

Will the two store formats eventually converge into one? It certainly seems that way. As people take a more preventive mindset towards their health, apples and oranges become just as important as shots and screenings — and supermarkets and drug stores each want what the other has.

At an analysts’ conference this week, Walgreens CEO Greg Wasson elaborated on these new opportunities:

“As patients gain more access to healthcare information and they become more responsible for making their own healthcare decisions, patients are indeed becoming more shoppers of health care.”

Walgreens plans to stock more fresh food, and is piloting a produce program in some of its urban Chicago stores. Rite Aid, meanwhile, recently partnered with Supervalu to offer groceries and produce in 10 of its South Carolina stores.

Supermarkets like Publix and Wal-Mart have expanded their pharmacy departments in recent years, and have added clinics staffed by nurses and nurse practitioners.

But don’t expect one channel to outdo the other in its core competency. Handling perishables is a complicated new game for drug stores. And supermarkets don’t always carry the range of medication and personal care items that a drug store does.

Rather, each channel is trying to chip away at the other’s customer base by increasing shopping occasions and grabbing those peripheral purchases. It’s a battle that’s escalating, and it’s all centering on health and wellness.