MARTIN'S GETS INTO PHARMACY BUSINESS

STEPHANIE LOUGHRAN

SOUTH BEND, Ind. -- Martin's Super Markets officially gets into the pharmacy business this month.

The retailer debuted its first five pharmacies in two separate soft openings in Michigan and Indiana last month, said Ken Bruce, director of nonfoods and grocery. The grand-opening celebration for the five stores will take place this month.

But it wasn't easy. The 18-store operator's entry into the pharmacy business took two years of research, several store reconfigurations and the expertise of an outside pharmacy service, he said. However, local competition mandated that the chain provide this in-store service to its customers.

"The reason we wanted to get into in-store pharmacies was we felt that to stay competitive, it was a service we needed to offer our customers," Bruce told SN. Martin's saw pharmacies as a way to keep customers from shopping at CVS, Walgreens or the onslaught of other freestanding drug stores and supercenters available "in just about every corner in town."

"Literally, we were the only ones not in the game," Bruce noted. The retailer plans to open three more pharmacies within the next two years, depending on the five new pharmacies' success.

By not providing pharmacy services, Martin's risked losing sales in other categories to freestanding drug stores, he said. In contrast, Bruce expects pharmacies to lift health and beauty care sales 10% to 15%, along with sales gains in the produce, greeting cards and natural foods departments.

In some of the stores, the retailer moved the entire HBC aisle closer to the pharmacy, which is situated in the middle of the stores near the front end.

"We wanted to make sure we got them in good locations," he said. "A lot of stores bury [pharmacies] back in the corner."

PRS Pharmacy Services, Latrobe, Pa., a company that helps retailers develop in-store pharmacy programs, assisted in "every aspect" of the creation of Martin's pharmacy services, said Harry Lattanzio, president. This included layout and design, recruiting and training staff, and putting marketing and promotional support in place, he said.

"PRS has been a great help. They take care of a lot of headaches and offer a lot of expertise," Bruce said.

The price tag for developing an in-store pharmacy runs between $125,000 to $150,000, depending on construction costs, said Lattanzio. This estimate does not include operating costs, he said.

The five pharmacies, which measure between 450 and 500 square feet, will "change how customers perceive the store, have an impact on HBC sales and give customers a needed service," said Lattanzio.

The stores got off to a running start. On the first day of operation in one store, Martin's filled 20 prescriptions. Another store filled 30 prescriptions the first day, said Lattanzio.

Martin's will provide additional pharmacy-related services like blood pressure tests, diabetic screenings and store tours with registered dieticians in three to six months after the retailer gains more familiarity about the services, he added.

While the soft openings in Michigan and Indiana, respectively, did not include publicity, the grand opening this month will offer giveaways and incentive offers like the "Baker's Dozen" card. Customers receive a $10 Martin's gift certificate upon purchasing their 13th prescription, said Bruce.

"The supermarket is a perfect place to have a pharmacy because the one thing that those stand-alone pharmacies cannot do is offer the food part of the equation."