Discount Drug Mart illuminates savings

Drug Store News, Jan 19, 2009 by Alaric DeArment

MEDINA, Ohio -- While its name suggests that it cuts customers slack on prices, Discount Drug Mart also has made an effort to give itself a few discounts.

The Medina, Ohio-based retail pharmacy chain, which operates 67 stores throughout Ohio, has installed new General Electric lighting fixtures at 37 stores that will deliver combined energy and maintenance cost savings equal to the margin earned on $14.2 million in sales over the life of the new lamps.

The chain enlisted United Resource Group to find out how to address the inefficiencies of the lighting schemes in its 25,000-sq.-ft. stores. It conducted a test at a store in Avon Lake, Ohio, with 10 fixtures installed.

"Our store manager noticed right away that he liked the new versus old lighting," co-COO John Wright said in a statement in September 2008. "We initiated this project with a primary focus on improving operational efficiency."

The lighting system delivers about 30% in energy savings compared with the previous system, or more than $560,000 per year across the 37 retrofitted stores.

The chain also announced last September that it had sold its pharmacy benefit manager, Immediate Pharmaceutical Services, for $40 million to PBM HealthExtras. Analysts had expected IPS' annual revenues to decline by up to $100 million.

But the 40-year-old chain has offered discounts to its customers, too. To compete with such retailers as Target, Walmart and others, Discount Drug Mart announced last October that it would reduce the price of its 30-day generic discount program from $4.50 to $3.99, as well as offer 90-day supplies for $9.99.

DISCOUNT DRUG MART

Sales 2008: $518.9 million *

RX Sales 2008: $248.15 million

Store Count: 68

* 12 months ended March 2008 versus 12 months ended March 2007