“Supermarket pharmacies increase store traffic, enhance the one-stop shopping experience for consumers and provide a marketing tool for the entire store by cross merchandising products and providing nutrition and diet information to the growing number of health-conscious shoppers,” said Janice Jones, director of research at FMI. “Certainly, more American consumers — and food retailers — are recognizing the critical role of supermarkets as health-service providers.”
According to the report, there are now more than 8,800 supermarket pharmacies in the U.S. — 17 percent of the retail pharmacy marketplace. The survey projects that the number of outlets will likely increase since more than two-thirds (68 percent) of new supermarkets include a pharmacy services area, most often combined with a comprehensive health and beauty care (HBC) department.
Supermarket pharmacies achieved the largest gain in prescription volume between 1999 and 2000 for the entire retail pharmacy marketplace, dispensing 389 million prescriptions in 2000 — an increase of 8.7 percent, according to IMS HEALTH data cited in the survey.
The volume of generic drugs dispensed by supermarket pharmacies remained unchanged
at 42 percent in 2000. The percentage of prescription sales from generics — 17 percent — also remained the same. Despite the flat figures, the survey suggests that an expansion of the generic drug market may be on the horizon, due largely to the expiration of patents for hundreds of drugs in the next few years and increasing pressure from consumers and health care plan sponsors to get more affordable drugs on the market.
Supermarket pharmacy sales reached $16.9 billion in 2000, 26 percent higher than 1999, according to data collected by the National Association of Chain Drug Stores. The median of the average weekly prescription sales per supermarket was $38,000 in 2000.
After two years of stabilizing at 20 percent, gross margins decreased one-percentage point in 2000. Similarly, the median gross margin on supermarket third-party sales had a one-point decrease to 16 percent in 2000. These declines can be attributed to the increased prevalence of third-party sales and the margin loss associated with those sales. According to the survey, the average percentage of prescription sales from third-party in supermarket pharmacies is now 84 percent, up from 64 percent five years ago.
Increasing Efficiency Through Interactive Voice Response and Central Fill
Nearly half of the companies in the survey (47 percent) were offering automated telephone answering/interactive voice response service (IVR) for their customers in 2000, compared with only one-third of companies in 1999. Among companies not offering the service, 55 percent plan to install an IVR system by the end of the year.
Supermarkets are also enhancing pharmacy operations by utilizing a central processing facility, call desk set up or central fill facility. Nearly one out of 10 companies reported having some kind of central fill operation in 2000, compared with zero companies in 1999. However, the survey suggests that the development of central fill facilities is still in the early stages, due partly to concerns with patient confidentiality, prescription tracking, dispensing accuracy and state regulations.
Supermarket Pharmacy Key to Whole Health Solutions
With consumer interest increasingly focused on the supermarket as a primary provider of health products and services, supermarket pharmacies continue to expand opportunities to educate consumers about wellness issues and to serve consumer needs for health-related information,
according to the survey. Many stores now regularly offer in-store health service programs, with blood pressure testing, flu vaccinations, cholesterol testing, blood glucose monitoring and store “wellness” tours being the most popular programs.
The survey also finds that food retailers continue to offer customers some type of disease state management (DSM) program, with 46 percent of supermarket companies offering a DSM program in at least one in-store pharmacy. Diabetes, hyperlipidemia and asthma continue to be the most popular.
Delivering Pharmacy Services Beyond the Store
The survey finds that supermarkets are developing less conventional ways of providing pharmacy services to their customers. Just over one-third (35 percent) of companies have installed drive-through units. Eight out of 10 supermarket companies with websites include the pharmacy as part of their site, offering pharmacy operational information, health information and services such as prescription refill.
To purchase Report from the 2001 Supermarket Pharmacy Survey ($15 members/$40 nonmembers) or for more information, please contact FMI Publication and Video Sales at (202) 452-8444 or click below.
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