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    FMI Study: Pharmacies Are Key Component of Supermarket Service Strategy

    WASHINGTON, D.C. - More than half of supermarket operators say that pharmacy operations are a very important part of their business strategy, and nearly 70 percent say that it will be an important component by 2004, according to a new FMI report.

    WASHINGTON, D.C. - More than half of supermarket operators say that pharmacy operations are a very important part of their business strategy, and nearly 70 percent say that it will be an important component by 2004, according to a report released on Monday by the Food Marketing Institute (FMI).

    The study, Report from the 2002 Supermarket Pharmacy Survey, also reveals that prescription sales (as a percentage of total store sales) and volume in 2001 increased for the fifth straight year, despite a reduction in pharmacy operating hours driven by a growing pharmacist shortage.

    "Now, more than ever, supermarket pharmacies are an essential component of food retailing operations," stated Michelle Del Toro Jaketic, research manager at FMI. "Pharmacies enhance the one-stop shopping experience for consumers by providing prescription drugs, periodic health screenings and advice from a trusted health care professional, as well as the foods and products they need for healthy well being."

    According to the report, there were nearly 9,300 supermarket pharmacies in the U.S. in 2001 -- up from the 8,800 recorded in 2000 -- giving supermarkets roughly 18 percent of the retail pharmacy marketplace. The survey projects that the number of outlets will likely increase since 60 percent of new supermarkets and 13 percent of remodeled ones include a pharmacy services area, most often combined with a comprehensive health and beauty care (HBC) department.

    "A pharmacy department in a store attracts customers by providing them with the convenience of shopping for food while fulfilling their health needs," added Jaketic. "Moreover, supermarkets are fast becoming an important source of health information."

    The inclusion of in-store pharmacies at the supermarket has positively impacted the industry. When asked about the effect of a pharmacy department on total store sales, all survey participants said store sales increased. The percentage increase varies among companies, with half seeing an increase of less than 6 percent and one-third seeing an increase of at least 10 percent of in-store sales.

    Other key findings in the study:

    -- The pharmacy department not only impacts store sales, but also drives HBC sales. Close to four in 10 respondents saw an increase in HBC sales of over 20 percent.

    -- Supermarket pharmacies achieved the largest gain in prescription volume between 2000 and 2001 for the entire retail pharmacy marketplace, dispensing 418 million prescriptions in 2000 -- up from 389 million -- according to IMS HEALTH data cited in the survey. The median of the average weekly prescription sales per supermarket was $39,017 in 2001, up from $38,000 in 2000.

    -- Nearly half of the companies surveyed said they offer some type of disease management program in at least one in-store pharmacy.

    -- Supermarket companies are increasingly using their Web sites to promote pharmacy operations by offering services and information to customers.

    -- Online prescription refill capability is still growing in popularity, with currently over half of supermarket pharmacies offering this service. Supermarket pharmacies received a median of seven prescriptions per day via their Web site in 2001.

    -- A practice that has gained interest in the medical community is e-prescribing, with 11 percent of supermarket pharmacies set up to receive e-prescriptions from physicians in 2001. An additional three in 10 plan to set up e-prescribing capabilities by the end of 2002.

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