John Lynch, vice president of Holliston-based Eaton Apothecary, recently visited the small chain’s newest store in Southborough.
Eaton Apothecary’s smaller stores might be the prescription for the perfect pharmacy, but not everyone agrees it’s what the doctor ordered.
While the nation’s giant drug chains offer up to 15,000 square feet of space, Eaton’s shops are much closer in size to the local druggist of the 1960s. With 19 stores from Brockton to Woburn, the Holliston-based company hopes to fill the need for personalized service.
“We want to be the Cheers of pharmacies,” said John Lynch, Eaton’s vice president, referring to the popular Boston bar “where everybody knows your name,” which was immortalized in the long-running situation comedy on NBC.
Launched in 1958 as the Strand Pharmacy in Dorchester’s Uphams Corner, Eaton has grown into a mom-and-pop chain against CVS/pharmacy, Walgreens, Rite Aid Pharmacy and Wal-Mart, as well as supermarket and wholesale club pharmacies. Its latest store opened last month in Southborough at the Town Center, a strip mall on Route 85. With its neat aisles, the shop offers a bare-bones approach to retail promising service and free delivery.
“We understand that our model is contrary to the trend for mega-stores and more products,” Lynch said “If I’m buying a TV, I’ll go to Costco. But when it comes to prescription drugs, we’re talking about my health. I don’t want to make that purchase next to big-ticket items and forklifts. The industry has tried to take a medical service and turn it into a product. Customers don’t like that.”
Retail analyst Michael Tessler, an adjunct marketing professor at Bentley College, said Eaton might be on to something in trying to fill the niche for customers who don’t like the chains.
“Nothing angers me more than going into one of the giant drugstores for a prescription,” Tessler said. “Even though no one is in line at the pharmacy counter, they tell you to come back in 30 minutes because it’s company policy to push you to shop in the store instead of getting the prescription quickly. Customers want fast, local, personalized service that they can count on. There’s definitely an anti-corporate backlash that can be tapped.”
Still, Tessler is not convinced that Eaton is the answer. He expressed surprise that the chain is growing. “What troubles me about Eaton is they don’t do things to make them stand out,” he said. “There are opportunities for pharmacies to bring back the look and charm of the old apothecary with the soda fountains. Instead, the Southborough store is just a box. That’s not the way I would recommend them going about it. It’s inexplicable why they’re still around.”
But other retail analysts insist that many customers, particularly seniors, care more about having a pharmacist they know than the look of a store.
“When we enter a new community, customers tell us that it’s nice to have a local, independent pharmacy,” Lynch said. “If you have questions, you want that relationship.”
Great Expectations
This year, Eaton expects revenues to reach $70 million, up from $65 million in 2007, according to Lynch. He said the chain always is looking for new locations but has not laid out a plan to expand by a specific number of stores over the next few years. The company has 300 employees with stores that range from 2,000 square feet to 5,000 square feet.
Eaton’s growth comes as independent pharmacies are disappearing. After nearly 50 years in Wellesley, Professional Pharmacy sold its business last fall to the CVS store on Linden Street, upsetting many longtime customers.
But others are still thriving. Sullivan’s Pharmacy, which has been in Boston’s Roslindale neighborhood since 1912, specializes in medical equipment not available at the bigger drugstores. Theatre Pharmacy in Lexington has served generations of customers and Jones Drug in Natick has been around since the late 1800s.
Drugstores are big business. The nation’s pharmacies had sales of $189.3 billion in 2006, the latest year for which data is available, up from $91.8 billion in 1996, according to the U.S. Department of Commerce.
CVS is the largest chain in the nation, with nearly 6,300 stores in 44 states and the District of Columbia. In 2007, the chain reported record revenues of $76.3 billion, compared to $43.8 billion in 2006. The company was founded 45 years ago in Lowell by brothers Stanley and Sidney Goldstein.
Walgreens has 6,179 stores in 49 states and Puerto Rico. Last year, sales hit $53.8 billion.
Last spring, Pennsylvania-based Rite Aid paid $3.4 billion to buy 1,850 Brooks and Eckerd stores. The deal pushed the company into new markets, including Massachusetts, Rhode Island and the Carolinas, and strengthened its presence elsewhere. The chain had revenues of $17.5 billion last year.
Today, there are not as many pharmacies now as there were in 1990, according to Laura Miller, senior economist for the National Association of Chain Drug Stores, a trade group. She said the chain companies have prospered because they have worked to be efficient.
