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Drug Store Retailing - US - February 2016

"The drug store market has expanded well beyond traditional drug stores to include other channels such as mass merchandisers, supermarkets, and warehouse clubs as well as mail order options that also fulfil consumers’ drug store needs."

- Diana Smith, Senior Research Analyst - Retail & Apparel

This report looks at the following issues:

  • Drug stores can expect continued moderate growth
  • Drug stores in fierce competition with Walmart and "other" channels
  • Lack of awareness about in-store retail health clinics

For the purposes of this report, Mintel has defined a drug store as a retail store where a primary component of the store is a pharmacy, selling prescription medicine and staffed with a pharmacist. Other categories commonly found at drug stores include over-the-counter medicine, beauty and personal care, household needs, and a limited selection of food. When referring to “drug stores,” this report considers those that are traditional drug stores, not including other retailers with pharmacies such as grocery stores, warehouse clubs, or mass merchandisers. These other retailers are also discussed in the report as locations consumers may shop for drug store needs, yet are not referred to as “drug stores.”

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Drug stores can expect continued moderate growth
            • Figure 1: Total US drug store revenues and fan chart forecast, at current prices, 2010-20
          • Drug stores in fierce competition with Walmart and “other” channels
            • Figure 2: Drug stores shopped, November 2015
          • Lack of awareness about in-store retail health clinics
            • Figure 3: Reasons for not visiting health care clinics, by age, November 2015
          • The opportunities
            • Beauty is a growth opportunity
              • Figure 4: Items purchased, November 2015
            • Humanizing the store via personalized health and wellness services
              • Figure 5: Ways of managing health, November 2015
            • Dual-pronged targeting strategy
              • Figure 6: Select influencers that would encourage more drug store shopping and attitudes about drug store shopping, by generations, November 2015
            • What it means
            • The Market – What You Need to Know

              • Slow but steady growth expected for drug stores
                • Over one third of Americans are obese, but will the tide shift in light of new tools and technology to aid in health management?
                  • Healthcare costs are unruly
                  • Market Size and Forecast

                    • Drug stores’ sales continue to slowly rise
                      • Figure 7: Total US drug store revenues and fan chart forecast, at current prices, 2010-20
                      • Figure 8: Total US drug store revenues and forecast, at current prices, 2010-20
                  • Market Breakdown

                    • Prescriptions continue to drive the majority of drug store sales
                      • Figure 9: Total US drug store revenues and forecast, by segment, at current prices, 2010-20
                      • Figure 10: Total US drug store revenues and forecast, by segment, at current prices, 2013 and 2015
                  • Market Factors

                    • Drug stores in prime position to aid America’s elderly
                      • Marketing outreach to Hispanics and Blacks should be a priority among drug store retailers
                        • Figure 11: US population, by race and Hispanic origin, percentage of total population, 2010-20
                      • America’s obesity problem worsens
                        • People are investing in their health and wellness
                          • Healthcare and medical care costs keep rising
                            • Figure 12: Personal consumption expenditures on healthcare, 2005-15
                          • Smaller store formats and stand-alone health clinics make healthcare more accessible
                            • Figure 13: Drug stores shopped, by area and select retailers, November 2015
                        • Key Players – What You Need to Know

                          • Consolidation continues, giving leading drug stores more leverage
                            • Retail health clinic visitation remains low, but is expected to pick up quickly as drug stores place emphasis on these assets
                              • Healthcare is becoming more personal
                              • What’s Working?

                                • Consolidation escalates leverage
                                  • Walgreens Boots Alliance (WBA)
                                    • CVS Health
                                      • Walmart
                                      • What’s Struggling?

                                        • Retail health clinic visitation remains low but is expected to develop
                                          • Figure 14: Retail health clinic visitation, 2013- 15
                                        • Who will drive this growth and what motivates them?
                                          • Figure 15: Retail health clinic visitation, by select demographics, November 2015
                                          • Figure 16: Reasons for visiting health care clinics, November 2015
                                        • What are the barriers to adoption?
                                          • Figure 17: Reasons for not visiting health care clinics, November 2015
                                        • Recent retail advancements support growth estimates
                                          • Walgreens Health Clinic
                                            • CVS Health MinuteClinics
                                              • Walmart
                                                • Target
                                                • What’s Next?

                                                  • Expect more personalization in all forms
                                                    • Personalization via “my health, my way” in-store services
                                                      • Figure 18: Role technology plays – Any usage/interest, by generation, November 2015
                                                    • Personalization via more automated healthcare and online privacy
                                                      • Figure 19: Personal health management, health record and personal health record, November 2015
                                                    • Personalization via front-door service
                                                    • The Consumer – What You Need to Know

                                                      • Most people get drug store needs from places other than drug stores
                                                        • Drug stores are becoming more of a destination for HBC buyers
                                                          • Drug stores can foster better health management
                                                            • Building loyalty in a fickle landscape
                                                            • Drug Stores Shopped

                                                              • Cross-channel competition intensifies
                                                                • Figure 20: Drug stores shopped – Any, November 2015
                                                                • Figure 21: Retailers or channels shopped, November 2015
                                                              • Drug stores must retain share of older and multicultural consumers
                                                                • Figure 22: Any traditional drug stores shopped, by select demographics, November 2015
                                                            • Items Purchased

                                                              • Drug stores are a key destination for beauty products
                                                                  • Figure 23: Items purchased, in-store or online, November 2015
                                                                  • Figure 24: Select items purchased online, November 2015
                                                                  • Figure 25: Select attitudes about drug store shopping, by select demographics, November 2015
                                                              • Influencers That Would Encourage More Drug Store Shopping

                                                                • Consumers can earn incentives just by taking better care of themselves
                                                                    • Figure 26: Influencers that would encourage more drug store shopping, November 2015
                                                                  • Multicultural consumers are especially influenced by loyalty program benefits
                                                                    • Figure 27: Agreement that better loyalty program benefits would encourage more drug store shopping, by race and Hispanic origin, November 2015
                                                                  • Drug stores should shoulder the responsibility of caring for an aging society
                                                                      • Figure 28: Select influencers that would encourage more drug store shopping, by generations, November 2015
                                                                  • Ways of Managing Health

                                                                    • High interest in new and engaging ways to track and monitor health
                                                                        • Figure 29: Ways of managing health, November 2015
                                                                      • Hispanics highly interested in ways to manage their health
                                                                        • Figure 30: Ways of managinghealth, by race and Hispanic origin, November 2015
                                                                      • Knowing how customers want to manage their health can guide drug stores’ targeting efforts
                                                                        • Figure 31: Ways of managing health, by drug stores shopped, November 2015
                                                                    • Attitudes toward Drug Store Shopping

                                                                      • More drug stores extending into private label and store brand
                                                                        • Figure 32: Attitudes toward drug store shopping, November 2015
                                                                        • Figure 33: Nice! private label brand display in Duane Reade, New York City, January 2016
                                                                      • Brands’ allegiance toward “healthiness” can appeal to customers who share those values
                                                                        • Figure 34: Agreement to shopping more at stores that support a healthful lifestyle, by generation, November 2015
                                                                      • Telehealth options appeal to multicultural drug store shoppers
                                                                        • Figure 35: Select attitudes toward drug store shopping, by race and Hispanic origin, November 2015
                                                                    • Appendix – Data Sources and Abbreviations

                                                                      • Data sources
                                                                        • Sales data
                                                                          • Fan chart forecast
                                                                            • Consumer survey data
                                                                              • Abbreviations and terms
                                                                                • Abbreviations
                                                                                  • Terms
                                                                                  • Appendix – The Market

                                                                                      • Figure 36: Total US drug store revenues and forecast, at inflation-adjusted prices, 2010-20
                                                                                      • Figure 37: Drug store sales and forecast of health, beauty, and personal care products, at current prices, 2010-20
                                                                                      • Figure 38: Drug store sales and forecast of health, beauty, and personal care products, at inflation-adjusted prices, 2010-20
                                                                                      • Figure 39: Drug store sales and forecast of food and beverages, at current prices, 2010-20
                                                                                      • Figure 40: Drug store sales and forecast of food and beverages, at inflation-adjusted prices, 2010-20
                                                                                      • Figure 41: Drug stores sales and forecast of other products*, at current prices, 2010-20
                                                                                      • Figure 42: Drug stores sales and forecast of other products*, at inflation-adjusted prices, 2010-20
                                                                                      • Figure 43: Population by age, 2010-20
                                                                                      • Figure 44: Percentage of people aged 20 or older who are at a healthy weight, overweight, or obese, 2009-12
                                                                                  • Appendix – The Consumer

                                                                                      • Figure 45: Drug stores shopped – Past four weeks, July 2010-September 2015
                                                                                      • Figure 46: Drug store shopping frequency – Past four weeks, July 2014-September 2015
                                                                                      • Figure 47: Coupon redemption at drug stores, July 2010-September 2015

                                                                                  Companies Covered

                                                                                  To learn more about the companies covered in this report please contact us.

                                                                                  Drug Store Retailing - US - February 2016

                                                                                  US $3,995.00 (Excl.Tax)