SHAW'S IS COMPOUNDING MORE PHARMACIES

PETER MALBIN

EAST BRIDGEWATER, Mass. -- Through acquisition and growth, Shaw's Supermarkets, based here, is continuing to expand its pharmacy business, with four more supermarket pharmacies opening by the end of March. Shaw's will have a total of 25 pharmacies in its 119 units, all in New England.

"There are even more to come during the course of the year," said Bernard Rogan, spokesman for Shaw's, which has been a wholly owned subsidiary of J. Sainsbury, London, for nine years.

A 65,000-square-foot Shaw's supermarket is set to open in New Rochelle, N.Y., sometime in the spring of 1998, Rogan said.

In the last year and a half, Shaw's has opened more than a dozen 65,000-square-foot supermarkets in New England, all with pharmacies. The first prototype in this large format opened in August 1995 in Fair Haven, Mass. Last October, Shaw's also acquired a dozen pharmacies when it bought 12 Edwards Super Food Stores, based in Windsor Locks, Conn., from Ahold, Zaandam, the Netherlands.

"We have a commitment to the continuation of pharmacy in our store environment," Rogan said. "Where space and market conditions permit, pharmacy has been introduced to older formats as we have remodeled them. But, in many cases, we haven't found the space to accommodate pharmacy."

Shaw's certainly has found the space to accommodate pharmacies in its new 65,000-square-foot units. Its pharmacies are approximately 700 square feet, and there is also space in the supermarket for a bank, dry cleaner/laundry and one-hour photo-finishing center.

The health and beauty care section is adjacent to the pharmacy. Shaw's devotes two 52-foot gondolas to HBC products, complete with four 4-foot endcaps.

In its newer stores, Shaw's has more than doubled the number of cosmetics stockkeeping units. There is also space for an additional 60 dental care items, and 100 more shampoo and vitamin SKUs.

"Similar to Sainsbury -- our parent company -- we continue to introduce new SKUs in HBC that are Shaw's own label," Rogan said.

In the 1996 fiscal year, about 40% of Shaw's total sales came from its "own-label" products -- a smaller percentage than in the United Kingdom, Rogan said. "There is tremendous loyalty to branded products in North America," he noted.

"Private label traditionally carries a higher gross profit margin than branded goods, but not always a higher penny profit," said Bill Swartz, senior vice president at MAI-Alper, a brokerage company based in Framingham, Mass.