Drug Emporium heats up Southern California

Drug Store News, August 20, 1990 by James Frederick

Drug Emporium heats up Southern California

REDONDO BEACH, Calif. - After a sluggish start in the mid-1980s, and with Phar-Mor now appearing in its rear-view mirror here for the first time, Drug Emporium is up and running again in Southern California. The off-price giant has opened four new stores in the greater Los Angeles region since it bought out a local franchisee in 1988, and will bring two more online by the end of the year.

Drug Emporium now has nine stores open in Southern California, and has nailed down leases for two new stores which will open late this year in Puente Hills and Lancaster, Calif., outside L.A. The chain is also "in various stages of negotiations" for leases on several more sites in the sprawling, densely-populated area around L.A., according to West Coast regional director of operations Tim Ziemke.

In addition to Redondo Beach, Drug Emporium now has units open in Fountain Valley, Fullerton, Tustin, North Hollywood, Anaheim, Covina, Chino and LaPalma.

"Our biggest challenge in California is to get our store count up; we need more locations," said Ziemke's superior, vp-operations Ron Parish. "We don't yet know what the L.A. market will hold, but we're prepared operationally and financially to take any viable site in the region. We know we need more locations."

Parrish, who met with Drug Store News during a recent swing through the West Coast stores, said the chain is also renovating older stores here extensively. Remodels include a complete overhaul and enlargement of the cosmetics department, the enlarging and relocation of home/office supplies to the front of the store, and the addition of new departments like books and even fresh flowers in some locations. Customer focus groups have been used to help plan renovations.

The latest store to get a facelift is the Redondo Beach store, which happens to be the highest-volume Drug Emporium in the country, despite a lack of adequate parking, according to Parrish.

Indeed, volumes at all the West Coast units are picking up as California consumers become more familiar with Drug Emporium's blend of steep discounts and broad, deep selection of H&BAs. "We're extremely happy with the growth of our L.A. stores, including the prescription volumes," said Parrish.

"Our biggest hurdle has been getting the awareness factor up among consumers here," he added.

With only nine locations, the chain has already begun some market-wide advertising, including ROP ads in the Los Angeles Times. With its nine units scattered in a wide swath across the L.A. region and the dense urban corridor between L.A. and San Bernardino, Drug Emporium is pushing up its name recognition in preparation for denser store penetration.

Drug Emporium's renewed efforts on the West Coast come none too soon. PharMor, now the nation's highest-volume off-price drug chain, will open its first California store early next year in Santa Ana south of L.A., and is actively negotiating for other sites in the region.

Drug Emporium was the first deep discount drug chain to penetrate Southern California when it opened its first West Coast location in Fountain Valley, Calif., roughly six years ago. The chain endured several years of lackluster performance in this key region under a local franchise agreement with a West Coast retailer before bringing the five stores then open under the corporate roof more than two years ago.

"We bought back this operation for two reasons," said Parrish. "First, because California is a huge market that demands a lot of stores, and second, because with the resources the franchisee had, he just wasn't able to sustain the kind of growth needed."

PHOTO : Drug Emporium is bracing for the inevitable deep discount battles around greater L.A.