Friday, January 13, 2012

Drugstore cowboys

A bunch of drug sellers plan to muscle into restaurants' turf, so some heads are likely to get banged. Luckily, bandages and aspirin will be near at hand.

Gauze, pills, lotions, and trusses were how those interlopers formerly made their money. But now drugstore dons like Duane Reade, CVS and Walgreen's are ripping out aisles of stethoscopes and canes to showcase sandwiches, salads, muffins, coffees and a host of other lunchtime and breakfast staples. At one of the prototypes near our New York offices, you can grab some made-to-order sushi along with a tube of Preparation H.

The restaurant business has harumphed a little about the charge of discount retailers into foodservice. Walmart, Target and Kmart could all draw blood because of their traffic and sheer might, as any thinking chain-restaurant operator will tell you. But until that happens, how much hand-wringing can you do? There's next week's sales target to hit.

If that lukewarm concern has been voiced about drugstores, I've yet to hear it. The business seems to regard the phenomenon as more of a curiosity than a threat.

That's not the case in the c-store industry, which fears a distraction from its quest for more fast-food sales. At a recent conference for that business, drugstores were repeatedly cited as a looming threat, as were dollar stores, the super-discount retailers who've presumably been helped by the economic downturn. They, too, are experimenting with ready-to-eat foods, mindful that the big quick-service restaurant chains don't have a monopoly on 99-cent sandwiches and drinks.

The issue for all those challengers is quality. Can they match the caliber of what's offered in a downtown takeout shop where food is the focus, not the add-on sale to a prescription for suppositories.

Here's some food for thought on that question, a video shot by Angel Abcede from our sister publication, CSP. It's a look at Walgreen's new food-heavy prototype in Chicago. You'll get a good read on the quality of food that's being offered by that chain. Afterward, you might want to see what sort of deal you could get on ulcer remedies.


Steven Johnson said...

The Grocerant niche continues to boom. Walgreens in the US is the first 87 Billion dollar company to enter the space. They will gobble up fresh food retail space.

However visit for a video of how the Grocerant niche is cultivating success in England.

deniseleeyohn said...

glad to hear restaurants breaking out of their competitive myopia and recognizing this threat -- I recently wrote about how QSRs may have more competition than they think: -- denise lee yohn