With one-quarter of the new year gone, the important stories of the year still wait to be written.

Chain Drug Review, David Pinto, Walgreens, drug chain, drug stores, Alliance Boots, CVS, tobacco products, Bob Narveson, Thrifty White, NACDS, NACDS Annual Meeting, John Standley, Rite Aid, NACDS chairman, chain drug store industry, Kerr Drug, Tony Civello, Joe Magnacca, Mike Bloom

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Inside This Issue - Opinion

New year isnít short on notable events

March 17th, 2014
by David Pinto

With one-quarter of the new year gone, the important stories of the year still wait to be written.

These events, however, have caught the attention of Chain Drug Review’s editors:

• Walgreens’ strong performance. The nation’s largest drug chain in terms of sales and store numbers is posting strong results from its drug stores, with February sales having increased by 5%, while same-store sales have advanced by an impressive 4.5%. More than the numbers, however, the retailer gives the impression that it is on top of its game, drawing customers and sales in record numbers while solidifying its role as perhaps the strongest pharmacy retailer in America. Finally, its merger with Alliance Boots, now almost two years old, appears to be producing the dividends both parties had expected, as the melding of manpower and ideas has strengthened both retailers. In short, Walgreens, three months into 2014, appears to be the drug chain that is leading the industry.

• CVS’ bold decision. The announcement last month that America’s most important health care provider would stop selling tobacco products by October 1 has produced unanimously positive feedback from government and media circles. Most interesting, the comments have had less to do with the revenue CVS is apparently prepared to lose than the ethical and moral precedent the decision has appeared to set. Indeed, though the decision to stop selling tobacco was obviously a difficult one to reach, it cannot be objectively criticized, at least in the context that positions CVS as a health care provider, one of whose priorities is the treatment of tobacco abuse and dependency. Thus, the retailer clearly deserves the plaudits it has been receiving, as much for the difficulty of the decision as for the decision itself.

• Bob Narveson’s tenure. Next month the one-year reign of Thrifty White’s chief executive, Bob Narveson, as chairman of the National Association of Chain Drug Stores comes to a close. At this year’s NACDS Annual Meeting in Scottsdale, Ariz., scheduled for the last week in April, Narveson will step down, to be replaced by John Standley, CEO of Rite Aid.

By all accounts, Narveson’s tenure as NACDS chairman has been remarkable — for several reasons. Foremost among them has been his commitment to the association and industry: During his year as chairman he has not missed one event, despite the remote location of Thrifty White in western Minnesota.

Equally impressive has been his success in formulating ideas, programs and initiatives. Under his leadership, NACDS has refocused much of its agenda on the profession and economics of pharmacy, which, he has continually reminded NACDS’ members, is after all the core of the chain drug store’s merchandise assortment — and business.

Further, Narveson’s tour of duty as NACDS chairman has reminded the industry, once more, that in the context of the chain drug industry’s primary business, the head of a regional drug chain is perhaps more effective in advancing the industry’s core agenda than a similar figure at a major chain might be.

• Departures I. For the first time in recent memory, the chain drug store industry has been forced to do business without the presence of Kerr Drug, the retailer that Walgreens acquired late last year. The loss is felt most acutely not in huge sales numbers but rather in the sense of stability that Kerr and other regional drug chains have traditionally provided the industry. The idea of Kerr as a permanent part of the industry has been reassuring as it relates to the industry’s future, while reminding those who have doubted that future that Kerr’s survival has insured the industry’s survival. Now Kerr is history — and, while other regionals remain, the sense of survival is not as strong or as apparent as it was even a year ago.

• Departures II. The departures of Tony Civello, who was Kerr’s senior manager, along with such industry fixtures as former Walgreens senior staffer Joe Magnacca and senior CVS merchant Mike Bloom, both formidable talents and personalities, offer further evidence that nothing is forever. These three personalities, as much as any three industry staffers, personified the best of chain drug retailing in terms of both professionalism and humanity. Their departure, whatever the tangible effects, has influenced the industry in a variety of ways, none of them positive. It has, in short, dehumanized the industry insofar as it has reduced the human equation. Put another way, these three executives, fixtures at NACDS Annual Meetings for as long as most people care to remember, will be among the missing at the NACDS meeting in Arizona in April. The loss will be more palpable as the event approaches.

Certainly, more news awaits as the year unfolds. Stay tuned.