HEALTH HUB

LYNNE MILLER

From Sniffles and Coughs to sneezes and colds, everyone eventually finds their miserable way to the supermarket pharmacy. Year after year, mainstream retailers have been ready with a variety of products and services that start with flu shots and end at the pharmacist's counter.

As health and wellness matures, however, consumers are coming to the store with more self-knowledge and a willingness to try unconventional remedies. Progressive retailers are adding more products and services to satisfy these shoppers, and how they organize this new spectrum of natural, organic and alternative HBC is critical to their success as a health and wellness destination.

Without a doubt, food retailers already deliver a comprehensive array of health care services, and the pharmacy is the hub. Back in 1962, Giant Food broke new ground when it opened the first pharmacy in a supermarket at a store in Pasadena, Md. Forty-five years later, close to 10,000 pharmacies operate in food stores. The number of supermarket pharmacies grew 3.5% between 2002 and 2006, according to the Supermarket Pharmacy Trends report for 2007, prepared by the Food Marketing Institute.

“As companies do more and more remodels, my sense is they add pharmacies to the new stores,” said Laurie Gethin, FMI's senior manager of pharmacy services. “From my own perspective, the perception of the supermarket pharmacy has improved in the eyes of pharmacists and in the eyes of consumers.”

Indeed, more than 50% of all new supermarkets feature a pharmacy, according to the study. On any given day, it's a busy place. More than 78% of retailers who participated in the survey noted a jump in the number of prescriptions filled per day, averaging 5%, with the median number increasing to 125 a day in 2006.

Pharmacies are also profit centers, FMI's report noted, with average gross margins of 21% last year. From 2005 to 2006, average weekly prescription sales per store rose from $39,000 to $42,000. A number of retailers reported weekly sales of more than $50,000 — a sign that the prescription drug business is likely to continue growing.

Retailers who operate the pharmacy as the core of their wellness programs can use the heavy foot traffic to showcase goods like homeopathic OTC formulations and walk-in clinics — none of which would otherwise be seen.

“We have seen a rise in homeopathic medicines being carried in chain supermarkets, as best sellers from natural product stores jump across channels,” said John Durkin, vice president of sales and marketing for Boiron, the French company that makes Oscillococcinum, a top homeopathic flu medicine, and other natural remedies.

Products for treating and preventing cold and flu fly off store shelves during the sneezing and sniffling season. Compared to the second and third quarters, dollar sales of the leading remedies can more than double in the first and fourth quarters, according to data from Information Resources Inc., Chicago.

“Retailers have to be ready for that spike,” said Bob Doyle, senior vice president of IRI's Healthcare Solutions Group.

Conventional OTC medicines with well-known brand names, and their cheaper store-brand equivalents, have a corner on the cold and flu market. Yet vitamin supplements and other alternative treatments are gaining favor and shelf space in mainstream stores.

“Sales of alternative homeopathic products are growing more and more each year,” said Maria Brous, spokeswoman for Lakeland, Fla.-based Publix, adding the stores will carry a larger assortment of homeopathic cold and cough products this year. “The customers are receiving them very well.”

Consumers no longer have to make a special trip to a natural products store to pick up their favorite homeopathic remedy, Durkin noted.

At Bashas' stores in the Southwest, Airborne and Mucinex are top-selling brands — Airborne for preventing colds and Mucinex for treating the symptoms, said Sue Vodika, category manager for health and beauty care at the Chandler, Ariz.-based chain. Stores also see a spike in demand for echinacea, an herb believed to boost the body's immune system and fight off infections. Airborne, a dietary supplement created by a former second grade teacher in 1997, is designed to boost the immune system, and now includes “Airborne On-the-Go” single-serve packets that can be poured directly into bottled water.

Formerly available only by prescription, Mucinex, an expectorant, is now available over the counter. Adams Respiratory Therapeutics, the company that markets Mucinex, plays up the drug's convenience: One dose lasts 12 hours.

“Mucinex is a pretty good product,” Vodika said. “Airborne is established. Now they're going with convenience in their line. Echinacea is one of the big guns during the cough cold season.”

If the retail health care scene is healthy today, the outlook for the future is equally robust. Operators with pharmacies are looking beyond shelf additions to services that include in-store clinics, medication therapy management and other wellness programs.

Pharmacies stand to gain if clinics reach a critical mass in supermarkets. Though only a handful of food retailers have installed them so far, they are expected to more than double by the end of this year, according to the Convenient Care Association. By the association's estimate, there are 300 in-store clinics up and running, many in drug stores. Food retailers with clinics include Wal-Mart, Target, H.E. Butt and Kroger, among others. The Little Clinic, based in Louisville, Ky., has facilities in 21 Publix stores. The walk-in offices offer treatment for common ailments including coughs, colds, flu and allergies. They appeal to busy shoppers who want to save themselves the time, trouble and usually higher cost of a trip to the doctor's office or emergency room.

For retailers, the centers provide an opportunity to build up prescription and OTC sales. Effective cross-merchandising and cross-marketing allows stores with clinics to increase sales of health-oriented food and beverages, according to a report on retail health care marketing released this year by IRI.

While consumers take advantage of health care programs at their neighborhood markets year-round, the services become especially important November through April, prime time for colds and flu. As soon as the sniffles strike, many consumers head to the supermarket for a quick fix. Depending on their personal preferences, shoppers may sign up for a flu shot, pick up an over-the-counter cold remedy or vitamin supplement, or stock up on their favorite brand of echinacea. They also might ask whoever's on duty at the pharmacy counter how the product could interact with other medications.

“It's pleasantly surprising to see a few more supermarkets wanting the pharmacist to be actively recommending and counseling, even for OTC medicines,” said Durkin of Boiron. “This type of affordable and accessible health care service will make a difference to the consumer.”

With so much variety coming into the store, however, consumers could get a headache trying to decide which medication best meets their needs. Many people don't understand the difference between antihistamines and decongestants, let alone which herbal remedies work best to fight off infections. Retailers would do well to have pharmacists advise shoppers on the pros and cons of the various formulas, and how they could interact with other OTC or prescription medications, IRI's Doyle said.

“That could be a differentiator, the local service,” he said.

To better compete with stand-alone drug stores, pharmacists should dispense information along with medication, Durkin said.

“The pharmacies that are successful in differentiating themselves present OTCs in clearly identifiable sections and have enthusiastic pharmacists who develop proactive programs to recruit customers and patients,” he said.

Clinical Analysis

Health clinics in supermarkets are in their infancy. Around 300 facilities are operating, though about 700 of them — in supermarkets, drug stores and other retail formats — are expected to open for business by the end of this year.

Only 5% of consumers had visited a clinic, according to a Wall Street Journal Online/Harris Interactive poll of 2,200 people. However, those who used the centers were highly satisfied. Consumers who visited the facilities for treatment of common ailments liked the convenience, quality of care, qualified staff and the cost, the poll showed.

“As more consumers become aware of [the clinics], they may be willing to try to get their health care services there,” said Jim Wilson, a pharmacist and president of Wilson Health Information, a New Hope, Pa.-based health care research company. “There's opportunity there but who's going to do it and do it well? A challenge to that is most people are not hardwired to receive their health care at pharmacies yet. It's outside the tradition.”

Assuming the clinics expand into more stores, and consumer acceptance continues, supermarkets should consider enhancing their services, noted Information Resources Inc. in a report released this year, “Unleashing the Power of the Pharmacy.”

The report recommended:

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