ALBERTSONS SEES PHARMACY OPPORTUNITIES IN SHAW'S BUY 2004-09-13 (2)

DAVID ORGEL

NEW YORK -- Albertsons, Boise, Idaho, is eyeing pharmacy as one of the next key segments for building synergies with its recently acquired Shaw's Supermarkets operation, said Kevin Tripp, president of Albertsons' drug store division and executive vice president of the company's drug store operations.

"Our recent acquisition of Shaw's has provided incredible opportunities in pharmacy," Tripp said at Goldman Sachs Global Retailing Conference in Manhattan last week.

He noted that Shaw's, which operates approximately 200 retail units, has only 85 pharmacies. "There is the opportunity to add about 30 pharmacies to Shaw's locations," he said.

Albertsons has already begun to "leverage our pharmacy expertise to implement programs to drive higher volume at Shaw's," he said.

Albertsons completed its $2.4 billion purchase of Shaw's and Star Markets on April 30. The retailer plans to use its Lancaster, Pa., distribution center for distribution of health and beauty care items to Shaw's and Star Markets stores, he said.

In addition, Albertsons sees strong potential with its store brand at Shaw's, he said. Albertsons operates more than 700 stand-alone drug stores in the U.S. under the Sav-on Drugs and Osco Drug banners and nearly 2,000 pharmacies in drug stores and food stores.

The focus on pharmacy follows successful early rollout of some non-pharmacy merchandising programs at Shaw's.

Albertsons has recently introduced its dollar-merchandising-inspired 10 for $10 program and a premium beef line into Shaw's units.

Tripp described some key initiatives in Albertsons' overall drug store business, which include:

Growing its new "Renaissance" drug store format through remodels and new stores.

Building its prescription file acquisitions in key markets.

Testing pharmacy automation tools.

Pursuing successful pharmacist recruitment and training programs.