Hannaford focus on combos

Drug Store News, Feb 19, 1990 by Christine Bizzarro

Hannaford focus on combos

NEW YORK -- Hannaford Bros. said it will close three Wellby drug stores, and open one combo and two super warehouse food stores, including one with pharmacy, in 1990.

Charles Crockett, assistant secretary, was quick to add at an analysts' meeting here that "the idea of steadily reducing Wellby drug stores is not part of the company's philosophy," even though the company will focus on combination stores this year.

Specific current plans include: * Three new stores in 1990, including a 43,000-square-foot Super Shop 'n Save combo with a pharmacy in Wells, Maine, that will cause an adjacent Wellby to close. * Expanding two food stores into combos with pharmacies, also causing adjacent Wellby stores to close--one in Millinocket, Maine, and another in Biddeford, Maine.

Bob Wade, treasurer of Hannaford, said, "There are good market opportunities in these areas to combine food and drug operations, and to make it a strong vehicle for serving customers and earning a higher rate of return."

Plans for 1990

Plans for Wellby in 1990 include relocating a store in Standish, Maine. "Last year we acquired three stores from independent pharmacists, and this year we may see more acquisitions of this type," Crockett said.

Crockett said there is a possibility of Wellby penetrating upstate New York, if independents are willing to sell.

Warehouse stores

The company also plans to open two Sun Foods super warehouse stores this year, the larger one with a pharmacy. In Utica, N.Y., it will open a 84,000-square-foot Sun Foods, the largest ever of all Hannaford stores. The warehouse store will also be the first with a pharmacy department.

"The space is feasible to put in a pharmacy department," Crockett said. "In our Plattsburgh, N.Y., Sun Foods store, at 53,000 square feet, there just wasn't any room for a pharmacy department, and there is too much competition in the prescription business there," Crockett said. He cited chains such as CVS, Fay's and Kinney Drugs as competitors.

In Utica, the Sun Foods pharmacy department will compete with Carl's, Fay's and Rite Aid, which dominate the market. The second Sun Foods store will open in Watertown, N.Y., a 53,000-square-foot site.

Hannaford ended fiscal 1989 with 76 supermarkets and 42 drug stores. Consolidated net sales and other revenues for 1989 amounted to $1.5 billion, a 20.5 percent increase over last year. The retailer attained 23.5 percent overall gross margins in 1989, up from 23 percent in the prior year.