Longs braces for challenge in Hawaii

WALNUT CREEK, Calif. —Longs Drug pulled up stakes in three states last year to focus on its core markets, and that move is helping it reinforce its base in Hawaii, a place it’s dominated for more than 50 years but is now home to newcomer Walgreens.

While Longs has declined to comment directly on Walgreens’ November 2007 debut in Hawaii, it’s been bracing for what’s arguably its biggest challenge ever in the Aloha State. Longs increased its store count by more than 15 percent in Hawaii in 2007—roughly double its overall average—and plans to open its first drive-through stores there later this year.

Longs chief executive officer Warren Bryant touched on Longs’ recent efforts in Hawaii at its annual shareholders meeting in May. While he never mentioned Walgreens arrival there, he reassured shareholders that Longs plans to hold on to its top spot in the state.

“We opened six new stores in Hawaii in 2007, bringing our total to 38,” Bryant said. “Longs has had a strong presence in this market for many years and is taking steps to enhance that presence.”

Bryant didn’t comment on Longs’ expansion plans in Hawaii for 2008, but it is likely to match its six openings in 2007 to counter a similar number planned by Walgreens. One store due to open in Honolulu later this year will be its first ever in Hawaii with a drive-through window, and it plans to add another drive-through as part of a Maui store remodel.

Drive-through pharmacy is one area in which Longs has evolved slowly. The 516-store chain currently has 57 stores with drive-through windows and opens them whenever space allows in new stores and remodels. Walgreens is making them a staple of its stores in Hawaii and plans to have up to seven stores open by the end of 2008, and eventually open up to 30 in the state. Conversely, drive-through locations have been a priority for Walgreens for many years, and as of the end of May, the company operated a drive-through window in 5,381 of its 6,252 stores.