Supermarkets rack up double-digit gains in Rx sales

Drug Store News, April 24, 2000 by James Frederick

Albertson's builds on synergies

The merger of Albertson's and American Stores is done, creating the nation's second-largest supermarket chain behind Kroger Co. and its largest supermarket/drug store retailer. The giant company's corporate restructuring into eight major divisions also is complete.

A national drug division has been established in new headquarters in Scottsdale, Ariz., under the direction of divisional president Kevin Tripp, and encompasses a unified national network of more than 1,850 free-standing drug stores and supermarket pharmacies.

Hundreds of staffers from American Drug Stores' old Salt Lake City headquarters and from other Albertson's locations have relocated to Arizona, starting fresh at a new and much bigger company.

Now, the real work begins. That work, said Tripp, is "leveraging the synergies" offered by the merger of all drug, HBA and general merchandise purchasing and marketing activity, for all Albertson's drug store and combo store formats, into a single chain of command in Arizona.

"It's obvious that we have some enormous markets today where we overlap, and both free-standing and combo entities have room to grow, with ample opportunity and synergies off one another. And our focus today is on those markets," said Tripp.

Prior to the $8.3 billion buyout of American, Albertson's was already building market share and pushing into new states, including Georgia, Iowa, Missouri, North Dakota and Tennessee. In the months leading up to the megadeal, the chain had acquired 10 supermarkets from Smitty's in southwest Missouri, 15 stores in Tennessee from Alabama-based Bruno's, and the 29-store Buttrey Food and Drug Stores Co., extending the chain into Montana, Wyoming and North Dakota.

Nevertheless, it was the merger with American Stores that catapulted Albertson's into a supermarket and pharmacy powerhouse, with sales of more than $37 billion and a store count of almost 2,500 units. Over the next two years, the company will add more than 100 drug stores and nearly 200 combo stores.

Also in line for funding is the Web site, Albertsons.com. In recent months, Albertson's has expanded its e-commerce capabilities and added Sayondrugs.com. Web browsers who visit Albertson's home page can now click on either Osco or Say-on to access a host of services, including prescription refill options and a drug store locator.