INVESTING IN BONDS

JANICE ZOELLER

PHOENIX -- Abco Markets here is building its pharmacy business one relationship at a time.

In choosing a pharmacy, "people are looking for someone to relate to," says Barrett Moravec, director of pharmacy. "Customers want to develop a relationship with that pharmacist in which they place their trust," he says.

What the chain is striving for and achieving in many instances is to get pharmacy customers to regard their Abco pharmacist as their own personal pharmacist.

Abco staff pharmacist Renee Tyree, says Moravec, has such a bubbling personality, despite having to use a wheelchair, that "people like her and want her to be their pharmacist."

He describes another Abco pharmacist, Jim DuBois, a pharmacy manager in Tucson, as having "a caring demeanor." This pharmacist offers delivery service, and, if need be, will deliver patients' medications himself. "We don't require our pharmacists to do this, but he does it because he is motivated to build his business." This pharmacy has weeks when it breaks 10% of gross store sales.

Abco's emphasis on building relationships also extends to those between pharmacy managers and store managers.

Abco Markets operates 18 pharmacies in 74 supermarkets, all in Arizona. Its pharmacy stores are evenly split between metropolitan Phoenix and metropolitan Tucson. The chain was formed 10 years ago when American Stores sold 33 Alpha Beta stores to a management team and investors. Then in 1988, Abco acquired Lucky Stores' Arizona division.

Abco plans several major remodels this year to its Desert Market format in which one new pharmacy will be added, and another will be expanded to improve work areas and add a patient counseling area. Abco also has plans for new stores, though locations have not yet been finalized. What is certain is that the new stores will have pharmacies.

"The whole key to success in pharmacy is getting the right people" as pharmacists, says Moravec. "It begins with the hiring process. We look for people with good customer service skills and a desire to use them, good communication skills, and a desire and ability to keep up with evolving technology."

Price will always be an issue, but it's secondary after convenience and finding someone to relate to, even in the competitive, overstored market of Phoenix, says Moravec.

"We also look for an entrepreneur spirit," says Moravec, "people who come up with ideas they would like to see implemented, such as new signage, rearrangement of the pharmacy or additional services."

To foster such an atmosphere, says Moravec, it's necessary to have the understanding and support of store managers for pharmacy. "I won't say that our experience has been entirely free of problems, but for the most part, the relationships between pharmacy managers and store managers are good and improving."

Indeed, one Tucson store manager, Dan Beck, was so interested in learning more about pharmacy and helping to build the business that he became a pharmacy technician and personally assists the pharmacy on those occasions during busy "crunch" periods by answering the phone, taking prescriptions and ringing up sales.

Beck also helped to bolster awareness of the pharmacy with a drawing for pharmacy customers to celebrate the department's one-year anniversary, his own idea. The winner got $75 worth of free groceries.

"This store manager has already decided that pharmacy will be a success in his store," says Moravec. "All that remains is putting in the effort. He understands that pharmacy customers can become grocery shoppers."

The efforts are paying off in faster-than-average growth for the pharmacy and potentially for the food store as well. "Some customers told us that now that the store had a pharmacy, they would tend to do more of their grocery shopping there as well," says Moravec.

Store manager support doesn't have to be this dramatic. Moravec says he would like for store managers and assistant store managers to spend 20 minutes in the pharmacy every couple of months and get a first-hand view of the kind of customer service that's being provided and see what has changed since the last time they were in the pharmacy.

Laying a foundation to build the relationship also helps when the pharmacist is faced "with that most horrible of situations to deal with, an unhappy customer," says Moravec. "That's exactly the time the pharmacist should call in the store manager. Some pharmacists are not as good at handling irate customers as store managers are, with their broader scope of experience."

Moravec also has sought to cultivate a close relationship with the director of nonfoods merchandising. Currently the focus of discussion is on Aleve. Procter & Gamble's new analgesic will be sold by the nonfoods department, but pharmacists will provide information and answer questions about the product.

At the same time, the nonfoods director alerts the pharmacy department about seasonal promotions that he has chosen not to stock but that the pharmacy might be interested in.

In one such promotion last summer, the pharmacy merchandised skin moisturizers containing sunscreens. "We carried the products as a floorstand display close to the pharmacy," recalls Moravec, with pharmacy getting credit for those sales.

Support for pharmacy comes from the very top of the company, says Moravec: from Ed Hill, president of Abco, and Tom Field, chairman of the board. "Tom will come around as we remodel stores and say to me, 'I want to make sure you've got a little consultation area for your patients, with chairs, a table and carpeting on that floor.' " Abco has broadened its customer support efforts to include various kinds of outreach programs. Abco's biggest single event was a program on diabetes held in November at Arizona State University in Glendale, and co-sponsored by the Arizona chapter of the American Diabetes Association. Some 350 people attended.

Speakers included an endocrinologist discussing drug therapy, as well as a nutritionist and exercise specialist. The 9 a.m. to 2 p.m. Saturday program concluded with a motivational speaker.

"We will do it again," says Moravec. "It got more people to know we have pharmacies in our stores. It also got our name circulated throughout the diabetes network, not only to potential customers, but also to doctors and diabetes educators."

For the last four years, Abco has provided flu shots on a rotating basis at its metro Phoenix stores from October to February. "People start calling us up in August asking when and where the flu shots will be done this year." Abco works with a medical laboratory whose nurses give the shots. The charge is $10, which is 100% reimbursable under Medicare Part B.

At one supermarket last October, the flu shots proved so popular that people were lining up all around the store. "The store manager was great," recalls Moravec. "He was serving cold drinks and cookies to customers waiting for their flu shot. I think they did 1,500 inoculations over Friday and Saturday."

Screenings for cholesterol, including lipid level and the ratio of HDL cholesterol to LDL, are conducted year-round. The most recent tests to be added are thyroid function and the PSA test to screen for prostate cancer. Colorectal cancer screening also has been tried. Moravec is interested in adding other programs as well, perhaps vaccinations for children.

The flu shots and other screenings, says Moravec, "reinforce the professional image of the pharmacy." Customers who receive the shots and tests also receive brochures and coupons for the pharmacy.

Individual stores are encouraged to participate in local outreach efforts, including "brown bag" events, presentations to senior citizen and other groups.

Abco has made a conscious effort to reach beyond the normal boundary of walk-in traffic with its outreach programs in part to compensate for the fact that Abco lacks the large, exclusive third-party plans of some of its competitors.

Moravec supports freedom of choice for customers to choose their own pharmacies, while acknowledging that the trend in Phoenix and elsewhere is toward exclusive contracts. "I think people should have a choice. Then they can choose the pharmacy they like for convenience, and the pharmacist they want to deal with."

Third-party prescriptions now account for 60% to 65% of total prescription sales. "Insurance companies are in the driver's seat currently. But this may change or certainly be altered, not only by potential federal plans, but by evolving market forces that will emphasize cost and perceived value as a measure of outcome," Moravec predicts.

Moravec recently joined Super Net, the supermarket pharmacy network, to help it compete for third party plan contracts. "We can offer more convenience to such customers," he says, "because they are already in our stores three times a week."

Abco pharmacies range in size from 250 square feet to 475 square feet, and in location in the store, part of the chain's legacy of having inherited varying formats from its two predecessors. Indeed, the thinking of where to put the pharmacy in the store is still evolving. "We've placed the pharmacies up front for the convenience of customers but they can cause problems in traffic flow. The current thinking is to locate them in the back at the end of a power aisle," says Moravec.

Moravec earned a bachelor of science degree in pharmacy from the University of Illinois at The Medical Center, Chicago. He moved to Phoenix in 1971 to escape the snow and cold of Chicago after having worked at an independent pharmacy. In Phoenix, Moravec joined Lucky Stores as a pharmacist and later became a pharmacy manager.

Moravec joined Abco with the merger of Lucky's Arizona stores in 1988. He started as a staff pharmacist at Abco and was soon promoted to pharmacy manager. He was named pharmacy director in 1992.

Moravec reports to Les Knox, senior vice president of marketing. He explains that because so much of his job involves operations, he also works closely with the vice president of operations, Sal Sepulveda.

Moravec recalls that when he first worked as a pharmacist in a grocery store, he wasn't sure he was going to like it. "Later, I realized not only that I really liked it, I came to the feeling that a supermarket has a lot of advantages as a practice setting.

"The extreme pressure of having to fill the prescription immediately is reduced. Most customers come into our stores not only get a prescription, but to do other shopping, too. It takes pressure off the pharmacist and makes it easier for them to concentrate on their work. Long-term, it can avoid burnout."

Pharmacy in supermarkets will continue to grow, says Moravec, in part because supermarkets can be seen as the modern equivalent of the village market. Like villages of long ago, supermarkets are organized as a cluster of shops, including a pharmacy, he says.

Pharmacists working in grocery stores have "nothing to apologize for," says Moravec. "We're professional. Professional is as the individual makes it. It doesn't matter what the practice setting is. If you are a professional person who looks out for your patients, you will be professional in the grocery chain or any other practice setting."