Duane Reade, champ of Manhattan, pressing ahead

Drug Store News, April 9, 1990

Duane Reade, champ of Manhattan, pressing ahead

NEW YORK -- Duane Reade, operator of the most productive drug stores in New York City, is planning to open its second non-Manhattan store later this year in the Bronx.

Like its predecessor, a Brooklyn store opened two years ago on Fulton St., the Bronx store is a reaction to a "site location" opportunity and not part of a program to simply expand the Duane Reade concept into new neighborhoods.

Duane Reade sets specific performance criteria for sites: they must generate $6 million to $7 million annual sales.

For example, the Brooklyn store is on a busy street closed to automobile traffic and turned into a mall. Foot traffic is "enormous, and the store has done exceptionally well," a company source said.

Opening by summer

The Bronx store, which will open by the summer, is on Fordham Rd., a section that resembles Chicago's Miracle Mile, except that destination stores here are mostly discounters. Among them: Alexander's and Rockbottom.

Duane Reade has always used traffic to offset the high costs of doing business in New York. Today, its 34 stores, all with selling space of 5,000 to 6,000 square feet, each generate over $6 million a year in per-store sales.

Management is still expanding the chain in its hometown Manhattan market, where it opened three stores in 1989 and will open another two in 1990.

Low-price, expanded mix

Consumers have long ago learned to favor Duane Reade's everyday low-price, cut-throat discount image. The chain's mix remains predominantly H&BAs, though in recent years it has expanded heavily into foods and beverages, which reinforce its convenience image.

Consumables growth has been in the 20-percent range annually; management feels that on an individual item basis, the chain is moving more bottled waters and snacks then any H&BA item. Foods and beverages now account for over 10 percent of total company sales, one source estimated.

Bath and personal care are other growth categories at Duane Reade.

About 25 Duane Reade stores also have cosmetics sales clerks who oversee the department, help customers, and staff separate registers, so customers can get in and out of the store fast with purchases.