Giant Eagle Prepares to Install Health Clinics

DAN ALAIMO

CHICAGO — Giant Eagle, Pittsburgh, is getting ready to decide on a health clinic operator and extend the program to 10 stores within 12 months, said Randy Heiser, the retailer's vice president of pharmacy.

After an initial test, which it discontinued last year, Giant Eagle has been searching for the right operator to work with, Heiser said. “We are currently evaluating who we are going to use as a clinic partner. We are hoping to make that decision in the next 30 days, and we have plans to roll out about 10 of these locations in the next 12 months.”

The first group of clinics will be in the chain's Ohio stores, he added. Heiser spoke to SN following a session on clinics jointly held by the FMI Show and the co-located FMI Pharmacy Conference here this month.

In his presentation, Heiser said that it's not too late for supermarkets to get into the in-store health clinic business and still enjoy a competitive advantage. “Today, having clinics in a retail environment is a point of difference. That's something a lot of companies are always searching for. But 10 years down the road, it may be a cost of entry,” Heiser said.

The clinics are a “disruptive innovation” in the health care field, providing “a cheaper, simpler, good enough offering” that eliminates the extras consumers are willing to do without, while lowering prices, he said.

Heiser observed how the Giant Eagle pharmacy program benchmarks Walgreens as a primary competitor.

“If you think you are competing with the folks that are running [chain drug] pharmacies, you have to take a serious look at these clinics.” Heiser noted that he preferred the term “convenient care clinics” to describe them.

Heiser presented a list of questions and criteria for supermarkets to consider about the clinic business. One is, what is the top priority of the clinic operator?

“The No. 1 priority for the retailer is the customer. You have to determine if your clinic partner is more interested in your customers, or in building their brand,” he said.

Another consideration is nurse selection, as customers are not going to differentiate between the clinic operator and the host store. “Their experience with that nurse is going to reflect on the brand you have on the outside of the building,” he said.

Noting how fast retail clinics are being installed, and even the failure of some operators, another presenter, Lisa Loscalzo, executive vice president, the Little Clinic, Brentwood, Tenn., said, “Events are really unfolding rapidly in this business.”

She noted that the number of clinics is growing from 88 in 2005, to 268 in 2006, to an estimated 1,000-plus this year.

Addressing profitability, she said the break-even point for most clinics is about 20 patients a day. Heiser estimated that a clinic will contribute $53,833 annually in total incremental gross profit to the store where it is located.