Rite Aid-Brooks/Eckerd union bodes well for OTC

Drug Store News, June 25, 2007 by Michael Johnsen

Over-the-counter and natural health suppliers got a jolt of good news last month with the announcement that the Rite Aid deal with the Jean Coutu Group on its Brooks/Eckerd stores cleared regulatory hurdles.

It's good news for all front-end suppliers, but especially OTC and natural health vendors. "We are about 35 percent more productive in the front end of an average store in the same areas that a Brooks/Eckerd store is," Mary Sammons noted in a conference call late last year. Sammons suggested that the Rite Aid planogram mix, seasonal program, event marketing and merchandising and its speed in introducing new items all will serve to help drive Eckerd's front-end performance.

Rite Aid's focus on its GNC store-within-a-store programs and its seven health care platforms promoted through the pharmacy will ensure that Rite Aid is able to drive OTC performance higher in its newly acquired stores. That's not to say that the Jean Coutu Group didn't do a fair job bringing Eckerd's one time overpriced OTCs back into line, and it's not to say that the Brooks operation didn't do a fair job promoting its health care brands. But it is to say that Rite Aid has some significant points of differentiation in this area, and that's going to help push OTC sales quite a bit higher across its newly acquired 1,828 stores in the ensuing 16 months.

For starters, there are the GNC departments. Rite Aid long has had a relationship with GNC, peppering a GNC department in more than 1,200 of its locations. Rite Aid frequently references those GNC departments as a strong driver of sales and traffic in its stores.

Rite Aid also has a dedicated health care platform promoting solutions for seven conditions--allergy, summer skin care, pain management, diabetes management, vitamins and nutrition, weight management and heart health. The comprehensive health management program was pieced together to showcase the Rite Aid pharmacist as the go-to source for all sorts of health care information, but the front-end traffic these programs help drive is no mistake.

And Rite Aid is an innovator in front-end merchandising as well, as evidenced by the chain's commitment to durable medical equipment. As reported in the April 23 issue of Drug Store News, Rite Aid has expanded its DME offerings significantly through its prototype Customer World stores, making them more destination centers in a burgeoning category than mere merchandising afterthoughts.

Michael Johnsen

Senior Editor