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Shopping Centers Today -> May 2001
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WEB MAY BE MIXED BLESSING FOR DRUGSTORES
By Mark Seavy
Among the forces now driving the drugstore industry is the Internet. Nearly every chain, large and small, has established a presence on the Internet as a means for simplifying the buying process for consumers, many of whom typically pick up their orders at a brick-and-mortar location where additional merchandise can be sold, industry officials say.
Leading the charge for the smaller retailers is CornerDrugstore.com, which is serving as a clearinghouse with links to 1,250 community pharmacies.
“We are taking advantage of a proven and effective online sales platform,” said George Bartell, president and CEO of Bartell Drugs, a 49-store Seattle-based chain. “It’s another shopping feature for the convenience of our customers.”
But not all Internet experiments have been harmonious. A tiny group of franchisees in the Drug Emporium chain, based in Powell, Ohio, recently won a case in which arbitrators ruled the parent franchisor cannot use the Web to sell to customers who live in the franchisees’ immediate areas. The order may cause parent companies to move more quickly to tighten pre-Internet contracts that establish “exclusive territories” but generally just cover the opening of nearby stores, industry officials say.
Drug Emporium has since sold DrugEmporium.com to HealthCentral.com, although company officials say the transaction was unrelated to the battle with franchisees.
Andrew Tomback, an attorney for Drug Emporium, dismissed the panel’s ruling, noting that the chain was forced to launch its Web business to remain competitive. “To the extent that a victory was won, it’s very much a victory for a dated way of doing business and thinking about the world,” he said.
But the victory writes another chapter in the ongoing evolution of drugstore chains — which are increasingly changing both their online and real estate presence.
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