Woolworth rolls out drug mart - Rx Place Drug Mart

NEW YORK -- Under its new Rx Place Drug Mart name, Woolworth Corp. plans to open up to 12 new discount drug store locations in the New York metor area in early 1994.

The stores, which average 6,000 to 10,000 square feet, will occupy former Wool-worth sites.

Woolworth announced early in October that it would close 400, or about half, of its ailing Woolworth general merchandise stores in the United States. An additional 330 Kinney and Fooquartes shoe stores will also close.

Woolworth, which reported revenues of $4.423 billion last year, plans to convert up to 100 of those sites into locations for its more profitable divisions.. The Rx Place division is negotiating for rights for some of those locations.

Growth projected

The Rx Place chain, with 25 units in the Northeast, had estimated sales of $230 million last year, an increase of 15 percent over the previous year. The chain could easily double in size by the end of 1994, according to Joe Dickerson, Rx Place's vice president and general manager.

The New York City stores are smaller than Rx Place's prototype of 25,000 square feet, and will be operated as discount, rather than deep discount, drug stores. Meanwhile, the Rx Place deep discount drug stores are located in suburban markets and often in malls. Woolworth is going forward with more Rx Place stores: The 26the location will be opened in New Jersey in early November.

The division's urban counterpart, Rx Place Drug Mart, already consists of four locations in Manhattan and one is Jersey City.

Long-term strategy

In the past year, Rx Place has been sharpening its mix, moving toward offering consumers a broader everyday assortment, in addition to deal buys. The chain has also forsaken a heavy general merchandise mix to concentrate on HBA. For example, the chain no longer carriers a large selection of seasonal merchandise; instead, HBA offerings have been expanded.

While the Rx Place and Drug Mart prototype sizes and locations are different, the formats are similar in their focus on HBA and pharmacy and their sharp price image.

"Every Drug Mart location, like the Rx Place stores, includes a pharmacy," says Dickerson. Prescription business accounts for 25 too 30 precent of the chain's business.

POS scanning in every location enables the chain to quickly catch trends and to make crucial adjustments to the mix.

"In one Manhattan store, we added too much household cleaning mrerchandise. The store has only been open for five weeks, and based on movement data, we have already scaled back," says Dickerson.

POS also makes it easy to tailor the stores to specific neighborhoods. Dickerson says that the Spanish Harlem location includes Spanish foods. Signage in the stores is bilingual.

"We are localizing the merchandise to be store-specific," he said. "In our suburban Rx Place stores, for example, 96 to 100 percent of our customers are women. In city locations, up to 46 percent of our customers are men." Men's toiletries offerings are much broader at these locations.

Other examples of site-specific marketing at the chain are:

* The extension of the underwear section to 6 feet at one midtown Manhattan location. "Business people often find their trips extended unexpectedly," says Dickerson;

* Expanded offerings in the ethnic cosmetics department at the urban locations;

* More snack-sized offerings in the food department to appeal to the office crowd;

* Pharmacists at every urban location who are fluent in Spanish; and

* Store hours that are tailored specifically to each site.

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