FIESTA MART TESTS MEDICINE SHOPPE FORMAT IN 5 UNITS

JANICE ZOELLER

HOUSTON -- Fiesta Mart here has opened five pharmacies in its supermarkets here under an agreement with Medicine Shoppe International, St. Louis. Two of the five are freestanding kiosks, a new format for Medicine Shoppe.

The retailer may open Medicine Shoppe pharmacies in more of its food stores if the format succeeds, said Bernie Murphy, a spokesman for Fiesta Mart, which has 33 stores, including 29 in Houston. "This is somewhat of a test," he said. "If these are successful, we'll look to put in more. We're very open to considering that."

All five pharmacies, which opened June 27, involve leased-space arrangements with Medicine Shoppe, a franchisor of 1,000 retail pharmacies nationwide. The Fiesta Mart pharmacies are independently owned by two franchisees. One franchisee owns four locations and has hired pharmacists to staff them. The other franchisee is the owner as well as the pharmacist.

The two pharmacy kiosks are each 27 feet across and 12 feet deep, and completely surrounded by the supermarket, said Debbie McBride, store openings manager for Medicine Shoppe. All five pharmacies are close to the front of the grocery stores, which range in size from 30,000 square feet to 100,000 square feet.

"With a kiosk location, we have prime visibility," said McBride. "We're taking advantage of all the traffic that is already coming into the grocery store."

The kiosk is also "more in line with the shopping patterns of most people," said McBride. "These pharmacies are designed so, as people are heading into their shopping pattern, they are going to pass right by, which is a great opportunity for them to drop off their prescription, continue with their shopping and then pick up their medication as they head to the checkout."

"Our kiosk is modular, so it can expand to adapt to store layout and needs," said Michael Rice, Medicine Shoppe's vice president of real estate.

The other three pharmacies, located at the perimeters of the supermarkets, range from 20 to 24 feet across and 16 to 21 feet deep. One is located to the right of the store entrance, one is to the left of the entrance, and the third is across from the checkout registers.

This brings to seven the number of pharmacies inside Fiesta Mart stores. The other two are leased-space arrangements with individual pharmacists not connected to Medicine Shoppe.

Medicine Shoppe pharmacies sell mainly prescription drugs, plus a line of 220 Medicine Shoppe-brand over-the-counter medications.

Having pharmacies "offers our customers one more reason for one-stop shopping," said Murphy. "They can do their grocery shopping and purchase prescriptions in one stop."

Fiesta Mart had discussed a similar arrangement with several chain drug stores, but the sticking point was control of the health and beauty care sales, said Murphy.

"We already carry OTC medications. That was a hangup with the national drug chains. The main reason for selecting Medicine Shoppe was that they don't sell OTC products," said Murphy, with the exception of Medicine Shoppe's own brand items.

HBC items carried by Fiesta Mart will remain "in line" in the main store aisles, where they are either adjacent to or near the pharmacy.

Murphy said Fiesta Mart needed a partner in the pharmacy business. "We know how to buy and sell groceries," he said. "We don't know how to buy and sell prescriptions and all that's involved in that business."

To make room for the pharmacies, other departments were relocated, including a wine shop, a vision center, customer service counter, infant clothing and a display of outdoor furniture.

The agreement with Medicine Shoppe fits a pattern for Fiesta Mart, which already has leased departments for jewelry, toys, clothing, banking and travel. "Leased arrangements are a for-profit portion of our business," said Murphy.

"Medicine Shoppe is well known," said Murphy. "We don't have to worry about a startup and any liability. They are comfortable with us and we're comfortable with them."

Putting its pharmacies inside supermarkets is the most recent evolution of Medicine Shoppe's tailoring of its pharmacy format to meet changes in the retail marketplace.

While most Medicine Shoppe pharmacies are stand-alone units, other Medicine Shoppe pharmacies have been built next door to supermarkets, many with a door adjoining to encourage customer traffic between the two retailers, referred to by Medicine Shoppe as its "sidecar" format.