Here are seven events guaranteed to be resolved, debated, dismissed or disregarded in the chain drug industry over the course of 2010.


David Pinto, CVS Caremark, PBM, community pharmacy, drug chain, Walgreens, CCR, John Standley, Rite Aid, Mary Sammons, NACDS, National Association of Chain Drug Stores, Walmart, Marketplace Conference, RILA, Food Marketing Institute, Leslie Sarasin, FMI, health and wellness, Kerr Drug, Tony Civello, Larry Merlo, Greg Wasson, Bryan Pugh, Joe Magnacca, Duane Reade, Bill Bergin, Mike Bloom, Lewis Drug, Mark Griffin, Tony Montini


















































































































































































































INSIDE THIS ISSUE
News
Opinion
Other Services
Reprints / E-Prints
Submit News
White Papers

Inside This Issue - Opinion

Things to watch for as the year unfolds

February 15th, 2010
by David Pinto

Here are seven events guaranteed to be resolved, debated, dismissed or disregarded in the chain drug industry over the course of 2010.

1. CVS Caremark will finally begin to get the Caremark part of that designation right by taking advantage of many of the synergies between the PBM and the drug chain that have thus far eluded it — and so begin to create significant distance between itself and the remainder of community pharmacy.

2. Walgreens will begin enjoying the advantages inherent in its CCR initiative and SKU-rationalization program, silencing the doubters and the critics, and reemerging as the one certainty in a changing chain drug universe. In the bargain, the drug chain’s success will put an end to the argument that no company can turn over so many top-level people so quickly and survive. Walgreens will do more than survive. It will thrive.

3. John Standley will move effortlessly into the CEO position at Rite Aid, and the drug chain will continue to gain momentum and marketplace credibility and leverage, though its ability to compete effectively with its two major chain drug rivals will remain an open question, one whose answer will be some time coming, if indeed it ever comes.

Meanwhile, two predictions can be safely made: Though Mary Sammons will remain as Rite Aid chairman for two more years — and stay active in the industry’s trade association — her role at Rite Aid will by definition be diminished. But it will be some time before the retailer will be able to dismiss Sammons and the considerable impact and influence — and enumerable contributions — that have marked both her tenure as Rite Aid’s CEO and involvement with NACDS. When legendary chain drug leaders are evaluated going forward, Mary Sammons will be among the first names that come to mind.

4. Walmart will reconsider and reposition some of its recent decisions that have resulted in a sharply reduced SKU assortment. People who claim to know best insist that the retailer has gone too far in trimming SKUs, and has perhaps gone too far in dressing up its stores to give them less of a bare-bones look and feel. These same observers are quick to acknowledge, however, that the stores have never looked more inviting. At bottom, though, the retailer has suffered for its SKU reductions.

5. The board of directors and leadership of the National Association of Chain Drug Stores will collectively determine, at long last, that the association needs some adjusting, that as presently constituted it is — aside from heath care lobbying, which it does very effectively — an organization that needs to find new ways to relate to its members and make its meetings, especially the Marketplace Conference, more compelling.

On paper, NACDS remains the most formidable retail trade association in America. On paper. But it is being increasingly challenged on all sides. RILA, the multichannel retail organization that now rivals NACDS in its ability to bring senior-level retailers and suppliers together across a range of retail segments, recently mounted what observers are calling the most successful top-level event in its brief history, a two-day leadership conference in San Diego that even the most skeptical of attendees wound up praising.

A week later, the Food Marketing Institute unfurled its annual Midwinter Conference, an event that, while longer on promise and commitment than delivery, nonetheless worked as an impressive preview of coming attractions, a peek at this organization’s vision — one crafted by Leslie Sarasin, its impressive new leader — and what that vision might come to mean for its retail and supplier membership. Still to be determined is what it might mean for the trade associations that compete with FMI for member time, commitment and financial support.

These challenges come at a critical time for NACDS, a time awash in issues, questions and challenges, both for the association and the companies that belong to it. Foremost among those issues for NACDS: how to effectively engage a retailer and supplier membership base that increasingly has to balance other pressing priorities with involvement in a trade association that once seemed central to their agenda.

6. Health and wellness will begin to replace pharmacy as the core health care component in the mass retailing community. Never mind that very few industry people have yet to define health and wellness. The idea of keeping people healthy is quickly replacing the core mission and practice of treating sick people as a primary objective of health care retailing.

This is particularly taking hold in the grocery industry, one that, until recently, had really not known how to position or market the pharmacies that have become essential to its mix. But under a health and wellness umbrella, positioning the pharmacy at the core of a diverse and multipronged health care effort makes sense. The brightest chain drug industry people — with (no surprise here) Kerr Drug’s Tony Civello at the forefront — are already taking note of this development, if not leading it.

7. Several personalities will continue to emerge in the coming year. Particularly noteworthy will be the growing influence of such industry leaders as CVS/pharmacy president Larry Merlo; Walgreens CEO Greg Wasson; Bryan Pugh, Walgreens’ chief merchant; new Rite Aid CEO John Standley; Joe Magnacca, Duane’s Reade’s chief merchant; Bill Bergin, Rite Aid’s key H&BA merchant; and Mike Bloom, CVS’ merchandising and supply chain chief. At the same time, such essential industry leaders as Kerr’s Civello and Lewis Drug’s Mark Griffin will continue to influence the industry they have helped lead and shape for so long.

Still to be determined, however, is who, if anyone, will emerge at Walmart to influence industry efforts to ensure that community pharmacy continues to be heard above the health care din that threatens to drown it out. And speaking of Walmart, that retailer, once so essential to NACDS, has all but forgotten the association, at least as far as participating in its key events during the year. If NACDS is to prosper going forward, the association needs to fully reengage the world’s largest retailer.

As well, questions remain as to who will emerge at Walgreens and Rite Aid in the aftermath of recent changes in the merchandising ranks of those two retailers. Will Tony Montini begin quickly to play a key role at Rite Aid? And perhaps even more to the point where suppliers are concerned, who will fill the very public roles at Walgreens until recently occupied by George Riedl, Dave Van Howe and Kathy Steirly?

Those are just some of the happenings guaranteed to happen — or not.

Advertisement