CVS, Walgreens Vie for Quick Trips

Articles
May 17, 2010

CVS, Walgreens Vie for Quick Trips

Months after Walgreens laid out its plans for fresh foods, building on its strong front-of-store posture with convenience foods, CVS is doing the same.

Months after Walgreens laid out its plans for fresh foods, building on its strong front-of-store posture with convenience foods, CVS is doing the same. There’s barely an inch uncontested between these two retail pharmacy giants – and that includes vying for more traffic and trips through food.

If the classic way to a man’s heart was through his stomach, these drug chains believe they can nourish relationships with all kinds of shoppers through healthy prepared foods. Walgreens currently looks more committed to the strategy than CVS, which is merely testing the idea in selected urban stores.

Walgreens has long carried food for every daypart, and it has more recently positioned some of its Chicago stores to fill in ‘food deserts’ where supermarkets are lacking. It is making a big bid to be a food purveyor to New York City residents through the 257 Duane Reade stores it acquired earlier this year.  

Bryan Pugh, vp-merchandising and store format development, told Bloomberg News that the Walgreens chain would test the sale of ready-to-bake pizzas, pre-cut fruits, salads, sandwiches and other freshly prepared foods. “We won’t get our customer every day on the way home, but if we could get 50% of our customers one day a week, that would do wonders for our sales,” he said.

Meanwhile, the Duane Reade locations have high food ambitions with baked goods, Starbucks coffee, fresh vegetables, frozen convenience items and more.

CVS has less of a food platform to build on – its mix is more skewed toward candy, snacks and private label. But by expanding grocery in certain stores, and tracking shopper uptake closely through its sophisticated ExtraCare loyalty program, the chain could refine assortments and maximize performance.

CVS has had some troubles in Connecticut, where the state alleges it sold out-of-date items including food. The chain will have to seal such operations gaps, but at least on one count it is making early strides:  A direct-mail piece to some ExtraCare members this month promoted food and offered $5.50 in brand-name coupons on Kellogg’s Fiber Plus, Campbell’s Chunky, General Mills’ Cheerios, Eight O’Clock Coffee, Kraft Foods’ South Beach Living, and Planters, reported In-Store Marketer of the In-Store Marketing Institute. 

The Lempert Report sees these efforts as added threats to supermarket Quick Trips. Although their assortments may be limited vs. grocery stores, the ubiquitous Walgreens and CVS stores promise quick in-and-out visits and the possibility of filling other household needs on the same trip.