Jim LeBlanc: K&B Services; president and chief operating officer

Drug Store News, May 20, 1996 by James Frederick

As president of New Orleans-based K&B, Jim LeB,anc is a big believer in offering customers in K&B's five-state market a broad selection of products and services. The chain's 180 stores handle roughly 26,000 SKUs moved through its own warehouse and hundreds of additional items its vendors ship directly to stores.

"Our turns are obviously not as good as they would be if we carried only the best-sellers," LeBlanc said. "But we look at good selection as one of our strengths, and we have no plans to reduce SKUs."

K&B stores average 15,000 square feet of selling space and carry a wider-than-usual mix of core drug products, general and seasonal items and hard-to-find OTCs. The stores also feature coolers for dairy products, soft drinks and beer, as well as locally sourced perishables and liauor and wine. "We also make our own ice cream," LeBlanc said.

Nevertheless, LeBlanc is belTind the move to a more information-driven planograming process in all departments. A recent store redesign by K8rB has cut average selling space to about 12,000 square feet in most new and relocated stores. In the process, the chain is ramping up its shelf efficiency and thus productivity -- which in turn is giving K&B the means to boost turns and lower operating costs.

"We have invewtory control problems like anyone else." LeBlanc said. "We're not going to cut selection, but we are looking at more sensible quantities."

LeBlanc concedes that K&B is prone to analyze any major ehar.ge very carefully before making a move. Therefore, a major POS rollout could not proceed before the process had been extensively tested in a single outlet in New Orleans. Said LeBlanc, "We just rolled into our second store [in mid-April], and it went without a hitch. I suspect we'll have 10 or 11 stores up and running by the end of the calendar year."

K&B is al.so rolling out a second-generation, UNIX-based pharmacy system that vastly improves the chain's ability to process third-party billing and speed dispensing, LeBlanc said. "Primarily what it's given us is speed," he added. "We're about 70 perceut third-party [prescriptions], and it was slowing everything down. Also, we want to be able to collect what we're owed."

K&B is expanding its drive-through prescription window's for much the same reason it carries so many SKUs, "to make the custamer happy," said LeBlanc. "By the end of this year, we should have 17 drivethroughs in new and remodelea stores. Virtually a third af all our pharmacy transactions are going through the window in stores that have it."

The drive-throughs mark a turnabout from K&B's position of a few years ago. "The [fear] that customers won't be able to walk the arsles if there's a drive-through window is silly. We've fauna out that the customer wants it and if we don't have it, they'll go elsewhere."

By making "price adjustments" to keep up with aggressive competition for the pharmacy customer, K&B has been able to drive its pharmacy business. "Our script volume was up 13 to 14 percent last year, and even better through the winter" due to a prolonged cold and flu season, LeBlanc said.

Even though K&B has operated in New Orleans since 1904 and has some 50 stores in the market, it faces stiff competition from two of chain drug retailing's finest: Walgreen Co., with sonre 37 stores in the market, and Eckerd Corp., which operates some 45 units in greater New Orleans. What's more, K&B is up against discount chains and combo operators like Albertson's and Kroger, both of which LeBlanc praised as tough competitors.