Brooks Pharmacy

Brooks Pharmacy – Company Profile

Lisa I. Fried

WARWICK, R.I. – This past year Brooks Pharmacy certainly became a force to be reckoned with in New England.

This new chain was essentially formed in 1995. After The Jean Coutu Group purchased 221 Brooks Drug stores from Revco D.S. in November 1994, Michel Coutu, who had previously run 22 Douglas and Maxi stores in the United States, combined those with the Brooks stores to form Brooks Pharmacy.

That was the easy part. Coutu, president and chief executive officer of Brooks Pharmacy, and his executive team then spent months setting up the infrastructure, marketing programs, information systems, distribution and operations to support the chain.

“The biggest accomplishment was bringing the whole organization together into an integrated company,” said William Welsh Jr., senior vice president of operations. The acquisition of 30 stores from Rite Aid last summer added to the work.

Judging from the sales growth over the past year, management certainly appears to be on the right track. Total drug store sales for the year rose 12.25 percent to $553.2 million. Same-store sales increased. 8.56 percent.

Snow costs millions

This year, January sales were a challenge because of the snow storms in the Northeast. In total, Brooks probably lost several million dollars in sales, Welsh said.

Aggressive advertising and marketing programs, as well an enhanced seasonal presentation, drove 1995 sales gains, according to Welsh. Christmas sales “more than met expectations,” he said.

Previous owners of the Brooks stores had not invested in a serious advertising program for some time. To reconnect with consumers, Brooks began to run some radio and television advertising, as wen as circulars on a weekly basis. The chain also created endcaps to promote new and sale items, as well as a temporary price reduction program and an everyday low pricing program promoted at the store level.

“From a consumer perspective, the advertising has been very positive,” Welsh said. “It gives them a new message several times a year.”

The television ads, which ran in limited markets in 1995, emphasized the convenience of the chain’s pharmacy departments. This year Brooks plans to develop television spots that focus on the whole store. Through the promotional programs, the chain is “trying to do different things to catch the eye of customers on their frequent trips to the pharmacy,” Welsh said.

The chain plans to continue similar in-store promotional programs this year and send out new ones. For example, it just rolled out a four-foot endcap of diagnostic aids for diabetics. Located near the pharmacy, the endcap should ‘create interaction between the pharmacy and customers,” Welsh said.

Fine-tuning begins

Now that the basic structures and processes are in place at Brooks, management hopes to fine-tune everything from advertising to the merchandise mix, and improve its use of technology.

“In 1995 we didn’t back away from doing anything, but in 1996 we are going to take a lot of the things we learned and fine-tune them,” Welsh said. The plan is “to take proactive measures to solidify ourselves in the states we operate in.”

This will include expanding the rollout of a prototype developed last year. The prototype, which ranges in size from 9,500 to 10,500 square feet, features expanded candy and convenience food, greeting cards in the front of the store (other Brooks stores have it in the back of the store) and cosmetics on the wall closest to the entrance (as opposed to the opposite wall).

In 1995, the chain operated 10 prototype stores. It will Operate at least 10 more prototypes, this year. “We will attempt to introduce it in as many locations as possible,” Welsh said.

About 50 percent of Brooks sales come from the pharmacy. In the first quarter of this year, the company installed a frame relay system that links the pharmacies, the mainframe at headquarters and third-party payor systems. The system speeds the adjudication process and enhances customer service, according to Welsh.

Introducing … POS

In June, the company plans to test a POS system at some of its stores. The company has already begun scrubbing its data to prepare for the transition and will train purchasing staff and other staff to deal with POS data later this year.

On the real estate front, in 1995 the chain acquired 30 stores from Rite Aid in Massachusetts and Rhode Island, remodeled 15 stores, opened seven new stores, sold 20 stores in Maine to Rite Aid and dosed 12 stores. At the end of the year it operated 247 stores in New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut.

The Rite Aid stores were all converted to the Brooks banner last year. The majority of them have been re-merchandised, and the rest will be completed this year. One reason Coutu considered them attractive was their location in urban areas, a different type of market for the chain..

This year the chain will continue to build new stores and relocate existing stores to strengthen its market share. Acquisitions are possible “if the opportunities present themselves,” Welsh said.

COPYRIGHT 1996 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.

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