Retail space abounds as Steel Town reinvents itself: the Pittsburgh drug store market has been a lesson in smash-mouth retail. The gloves came off before the ink was even dry on the Eckerd deal that brought Brooks into the market

Drug Store News, June 6, 2005 by Michael Johnsen

Walgreens is on the hunt for real estate opposite core competitors in what they call the "testosterone" site, Kelly noted, so called because the direct competition challenges Walgreens operators to outperform.

One for the books

First established around 1920 just five miles outside downtown Pittsburgh, Community Drug has just about outlived every independent within a five-mile radius, with the possible exception of Medicine Shoppe-claimed owner and operator David Hairhoger. "As an independent pharmacist, I'm certainly not concerned about what Walgreens is going to do to me," he said in response to Walgreens' robust expansion plans into the Pittsburgh market.

Community Drug is well-established within its community and has done a decent business serving a niche market in custom compounding. The 2,000-square-foot pharmacy also offers consultations on health and nutritional supplements and dispenses pet medicines, as well. In all, the store fills 1,200 prescriptions per week.

PITTSBURGH: WHO'S WINNING *

                        2004 Rx      2004 front-end    Total stores
                      market share   market share **       w/Rx

Brooks-Eckerd             29.9%           42.3%             97
Giant Eagle               16.9              NA              55
US                        15.5            20.0              46
Rite Aid                  13.5            22.1              56
Wal-Mart ([dagger])        3.7              NA              16

Source: Chain Store Guides 2004 Drug Industry Market Share Report
* Market defined as Pittsburgh ** Reflects drug stores only
([dagger]) Includes Wal-Mart discount stores and supercenters

PITTSBURGH: THE STAKES *

Population                           2,412,469
No. of households                    1,001,369
Median disposable
  income ([dagger])                    $34,951
Total Rx sales **                     $1,298.5
Total front-end ([dagger][dagger])
  sales **                              $452.3

THE SIDES

Drug stores                                434
Mass merchants                             256
Supermarkets                               231
Warehouse clubs                              7

Source: Chain Store Guides 2004 Drug Industry Market Share Report

* Market defined as Pittsburgh ** Sales in millions
([dagger]) Per household ([dagger][dagger]) Reflects drug stores only