PRAIRIESTONE BUYS D&W PHARMACY OPERATIONS

Wendy Toth

GRAND RAPIDS, Mich. -- D&W Food Centers here is converting its in-store pharmacies to PrairieStone Pharmacy, Minneapolis, which recently bought D&W's pharmacies.

The conversions will require a smaller footprint and other changes, said Ron Cox, vice president of marketing for D&W Food Centers. All former D&W pharmacies are operating under the PrairieStone Rx banner. The first pharmacy conversion to PrairieStone's store-within-a-store model is scheduled for October. All others will be converted in 2006, at a rate of approximately one to two per month, Cox said.

"The pharmacy business is a key component of our strategy and we want to ensure it remains a successful part of our operation," Cox said.

The need to focus on its core food business combined with the strategy offered by PrairieStone led D&W to this partnership. "When we saw the type of operation PrairieStone could provide, the manner in which they could elevate our service to our customers and the overall benefits of their program, we felt it was in ours' and our customers' best interest to form a partnership with them," Cox said.

The PrairieStone Pharmacy model includes a full-service pharmacy with an inside-the-supermarket footprint of about 400 square feet. This model relies on automated prescription-dispensing technology to increase efficiency and customer contact.

"D&W was able to sell to us rather than a competitor and we are keeping them in-house, giving back retail footage, and providing an added revenue stream by leasing space within the store," said John Brady, cofounder, PrairieStone Pharmacy.

All D&W pharmacy associates were offered positions within the PrairieStone organization and "the opportunity was met with great acceptance," Cox said. Once the new systems are in place, D&W plans for customers to experience faster fill times and more time spent with staff.

"Our customers will see no impact from working with those they have come to know and trust at D&W as the staff will remain the same," Cox said.

Modifications will need to be made to house a smaller pharmacy area. "Over time there will be some changes to our physical pharmacy space as the PrairieStone model requires less space than we currently are utilizing," Cox said.

The retailer is reviewing plans to determine what changes in space or location will be needed for each store. "We will be developing a schedule to accommodate physical changes during the transition period," Cox said.

Through its program, PrairieStone will also be offering a lower price structure. "Due to automation technology, we are very aggressively priced and due to increased retail space, we provide a spike in OTC and HBC sales," Brady said.

"PrairieStone Pharmacy is culturally very much in line with how we wish to serve our customers and we believe this partnership will benefit all involved," Cox said.