A modest proposal

If there is a word associated with retail pharmacy in recent years, it’s “reboot.” You could also use “restructure,” if you like.

We’re not picky. The bottom line is that major retailers (and regionals) are taking stock. Rite Aid has filed for Chapter 11 bankruptcy and is reportedly closing hundreds of locations. Walgreens, too, has been restructuring to address changing realities and to improve its financial outlook. In addition to naming a new CEO, the company closed stores, cut staff and is eyeing the sale of some divisions.

And after profits fell 37% last year, CVS announced a restructuring plan to terminate certain initiatives as well as its intention to eliminate 5,000 jobs.

So what does all of this have to do with this month’s cover story? Plenty, actually. The way we figure it, companies have been forced to look at all aspects of the business—from staffing to SKUs—and store footprint is an important part of that. Our cover story looks at states that have potential for pharmacies as they right-size their store count and reposition for growth.

Market conditions are tough, but Americans are getting older, leading to consumer demand for pharmaceuticals and other products and services related to health ailments. States with older populations tend to need more pharmacy services.

Age is just one factor to consider when evaluating potential markets, however. Others include population growth, employment levels, education and the competitive landscape. But perhaps the most critical variable in the mix is the state regulatory environment, which has a direct impact on revenue, profitability and staffing.

Naturally, these aren’t the only states that are promising, but the list gives retailers a nice place to start as they retrench and position themselves for the future. You’re welcome!