Inside This Issue - Opinion
NACDS Annual Meeting is the place to be
April 22nd, 2013
by David Pinto
Once again, the National Association of Chain Drug Stores Annual Meeting, the seminal event in the mass retailing calendar, is upon us.
Some 2,000 retail and supplier executives are now gathered in Palm Beach, Fla., to review and debate the impact of recent events, strategize and plan the immediate future, and discuss the state of business — and business relationships — between individual retailers and suppliers.
Attendees are spending the week listening to industry people evaluate, or attempt to evaluate, the current state of the mass retail industry while business and government executives attempt to explain events that continue to shape the outside world.
Bob Narveson, the much-admired chief executive officer of Thrifty White, is being formally introduced as successor to Walgreens chief executive officer Greg Wasson as NACDS chairman. Finally, the evening calendar is crammed with social events, as individual supplier companies strive to outdo each other with lavish, sometimes impressive, occasionally compelling events designed to attract and please the attending retailers.
Amid all these activities, the core of the Annual Meeting is, more decisively than ever, the one-on-one meetings between retailers and suppliers. Of late, these individual sessions have emerged as pivotal to the year ahead in reviewing what has gone right (and wrong) thus far and programming activities designed to ensure that the eight months left to 2013 are sufficiently productive for both parties.
While the emphasis on individual meetings will produce varying degrees of success, certain overarching questions will dominate. Among them:
• How is the Walgreens-Alliance Boots partnership, now almost a year old (it was announced last June), unfolding, and what are the implications for Walgreens, its competitors and the supplier community? Indeed, the state of this union, 11 months in, is far from clear — and suppliers are getting mixed messages about priorities and key players. The latter is especially true in the aftermath of the departure of Joe Magnacca, the senior Walgreens merchant, who left last winter to head up the RadioShack electronics chain. Since then two Walgreens executives — Bryan Pugh and Mark Wagner — have emerged as the drug chain’s pivotal players going forward. Yet to be determined is who among the Alliance Boots staff will emerge as the key executive on the Boots side of the equation in the assimilation of the two retailers’ businesses.
• What will Walgreens and Alliance Boots’ decision to acquire a stake in AmerisourceBergen, America’s No. 3 drug wholesaler, mean for chain drug retailing going forward? No one doubts, even at this early date, that its impact will be significant. But what forms that impact will take, and which parties it will most dramatically affect, remain subject to speculation. Even now this much is certain: Walgreens and Alliance Boots’ agreement to acquire a stake in a major drug wholesaler is a game changer — and chain drug retailing will never again be what it was as recently as two months ago.
• What lasting impact will last year’s Express Scripts upheaval have on community pharmacy? A more appropriate question might be whether CVS can retain the gains it made during the months when Walgreens did not welcome Express Scripts customers or, conversely, how many of those customers Walgreens can ultimately win back.
• Is Rite Aid’s revival for real, or are the drug chain’s sudden uptick in performance and return to profitability merely aberrations in a continual slide to obscurity? Certainly the supplier community is rooting for Rite Aid, both because of its importance in helping normalize an industry increasingly dominated by two companies, and because the people running the drug chain are well regarded within the supplier community. But supplier interest is not enough to revive consumer excitement in a drug chain that, many believe, will never return to its former position as a chain drug leader and innovator. On the other hand, those same people acknowledge, perhaps some of the retailer’s exciting new wellness-based programs just might do the trick.
Then there are the other issues: Can the nation’s regional drug chains retain their momentum in a market increasingly dominated by the major drug chains? How much of an impact will Bob Narveson, a hugely popular and impressively innovative figure within the chain drug community, ultimately come to exert on an industry that has come to rely on the leaders of larger drug chains to lead it?
And perhaps most significant: How will the world suddenly transformed by a restructured health care system affect the nation’s drug chains? Initially, most observers believe America’s community pharmacy retailers will benefit, if only because some 35 million Americans will gain prescription drug coverage. Others claim, however, that this is a gain that is somewhat illusory, and that it will mean little for chain drug retailing in the long run.
However these issues and questions ultimately resolve themselves, little doubt remains about one point: The 2013 NACDS Annual Meeting promises to be one of the more compelling — and contentious? — in a series that has generally yielded impressive events and memorable developments.