One intersection, three pharmacies
One intersection, three drugstores.
What’s up with that?
Traffic can’t be that bad at the Englewood intersection of Union Boulevard and Wenger that drivers require that many aspirins. Yet on the front page of the May 8 Neighbors section is a story about Walgreens getting approval for a new store across the street from Rite Aid Pharmacy and Kroger, which houses its own drugstore.
“It’s warfare,” said Irene Dickey, a University of Dayton lecturer in the School of Business.
“They wouldn’t have gone there if the numbers weren’t right,” she said. Walgreens either believes there is enough business for three stores or that it is a strong enough operation to beat out the competition, she said.
Dickey explained the numbers companies look at goes beyond the simple demographics of the Census to something call psychographics. That is a look at the behavior of people in a particular area. Are they health conscious, for instance. That would have a great impact on a drugstore.
In addition, companies will often have access to the accounts of health care facilities and insurance companies. “AARP has collected a lot of data,” she said, “that they make available for a price.”
According to Dickey, Walgreens is a hot brand at this moment. The company reported record earnings and sales for the second quarter of this year and for the first half of this year, according to the company’s Web site.
“They are in a huge growth phase,” Dickey said. “The more stores they have, the greater the economies of scale.”
Examining the various data helps a company cut down on the risks of locating a new store. Failure of a store can have a huge effect on companies.
“The consumer might drive by and notice that a store is closed. They may not need anything at the moment, but that closed store will affect how they think about the brand,” Dickey said.
“Walgreens is a strong brand. A failure, or failures, could cause the demise of the brand name, lead to a negative perception.”
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