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The Drug Store Shopper - US - January 2014

“Drug stores continue to live in danger of losing core market sales to mass merchandisers and supermarkets both OTC products and pharmacy services. Maximizing their position as a local retailer, creating laser focus on customer service, and continuing to develop a closely integrated online/offline service offering should be high priorities and provide a strong defense.” – Ali Lipson, Senior Retail & Apparel Analyst

This report looks at the following areas:

  • How are traditional drug stores evolving in a competitive market?
  • Is online shopping a threat to brick-and-mortar drug stores?
  • Are retail health clinics a viable alternative to traditional care?
  • How can drug stores encourage shoppers to spend more?

Total drug store retail sales reached $235 billion in 2013, and are expected to increase by more than 2% in 2014. Drug store retail sales are expected to rise 12% between 2013 and 2018. The growing aging population and their related health concerns, changes in healthcare and the expansion of retail health clinics will impact this market over the next few years.

This report focuses on drug stores, and offers sales trends, profiles of major players in the US market, as well as a detailed exploration of consumers’ attitudes, usage, and shopping behaviors.

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.

This report has the following objectives:

  • To quantify the size of and trends within the drug store market and key CPG segments.
  • To identify the shopping behaviors and preferences among drug store shoppers.
  • To review the role and position of the drug store in the light of pharmacy operations in other stores, consumers’ preferences for online engagement and the impact of the Affordable Care Act

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                      • The market
                        • Figure 1: Fan chart forecast of total US drug store sales, 2008-18
                      • Market factors
                        • Aging population will benefit the drug store market
                          • Figure 2: Population aged 55 or older, by age group, 2008-18
                        • Obesity epidemic likely to impact drug stores
                          • Figure 3: American adults by weight category as determined by body mass index (BMI), 2008-Oct. 28, 2013
                        • Expansion of retail clinics
                          • The consumer
                            • In-store shopping far more common than online for drug store needs
                              • Figure 4: Retailers shopped for drug store needs, October 2013
                            • OTC and prescription medication most likely drug store purchases
                              • Figure 5: Items purchased at drug stores, October 2013
                            • Many are loyal to drug stores, retailers need to retain them
                              • Figure 6: Drug store shopping behavior, October 2013
                            • One quarter of consumers have visited a retail health clinic
                              • Figure 7: Retail health clinics visited, October 2013
                            • What we think
                            • Issues and Insights

                                • How are traditional drug stores evolving in a competitive market?
                                  • The issues
                                    • The implications
                                      • Is online shopping a threat to brick-and-mortar drug stores?
                                        • The issues
                                          • The implications
                                            • Are retail health clinics a viable alternative to traditional care?
                                              • The issues
                                                • The implications
                                                  • How can drug stores encourage shoppers to spend more?
                                                    • The issues
                                                      • The implications
                                                      • Trend Application

                                                          • Inspire Trend: FSTR HYPR
                                                            • Inspire Trend: Prepare for the Worst
                                                              • Mintel Futures: Old Gold
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Drug stores market remains stable
                                                                      • Figure 8: Total US drug store retail sales and forecast, at current prices, 2008-18
                                                                      • Figure 9: Total US drug store retail sales and forecast, at inflation-adjusted prices, 2008-18
                                                                    • HBC represents largest share of drug store segments
                                                                      • Figure 10: US drug store sales and forecast of selected product categories, 2012 and 2013
                                                                    • Fan chart forecast
                                                                        • Figure 11: Fan chart forecast of total US drug store sales, 2008-18
                                                                    • Market Drivers

                                                                      • Key points
                                                                        • Aging population likely to benefit the drug store market
                                                                          • Figure 12: Population, aged 18 or older, by age, 2008-18
                                                                        • Obesity epidemic likely to impact drug stores
                                                                          • Figure 13: American adults by weight category as determined by body mass index (BMI), 2008-October 28, 2013
                                                                        • Introduction of the Affordable Care Act
                                                                          • Impact of online and mobile shopping
                                                                            • Expansion of retail health clinics provides alternative to traditional care
                                                                              • Competition from other channels drives creativity for drug stores
                                                                              • Retailer Overview

                                                                                  • Drug stores
                                                                                    • CVS Caremark
                                                                                      • Duane Reade
                                                                                        • Rite Aid
                                                                                          • Supervalu (Sav-On)
                                                                                            • Walgreens
                                                                                              • Issues and opportunities for drug stores
                                                                                                • Mass merchandisers
                                                                                                  • Target
                                                                                                    • Walmart
                                                                                                      • Issues and opportunities for mass merchandisers
                                                                                                        • Online-only retailers
                                                                                                          • Amazon.com
                                                                                                            • Drugstore.com
                                                                                                              • Soap.com
                                                                                                                • Issues and opportunities for online-only retailers
                                                                                                                  • Other local/regional drug stores
                                                                                                                    • Bartell Drugs
                                                                                                                      • Discount Drug Mart
                                                                                                                        • Navarro Discount Pharmacy
                                                                                                                          • Issues and opportunities for local/regional drug store retailers
                                                                                                                          • Innovations and Innovators

                                                                                                                            • CVS…
                                                                                                                              • …launches more new products to Nuance Salma Hayek line
                                                                                                                                • …introduces Total Home line
                                                                                                                                  • Walgreens…
                                                                                                                                    • …opens net zero energy store
                                                                                                                                      • …store features Zen Balanced Living
                                                                                                                                      • Marketing Strategies

                                                                                                                                          • Strategy: Personalized offers
                                                                                                                                            • Figure 14: CVS video “The new CVS/pharmacy myWeekly Ad,” September 2013
                                                                                                                                            • Figure 15: CVS ad “What’s your deal?,” October 2013
                                                                                                                                            • Figure 16: CVS email ad, October 2013
                                                                                                                                            • Figure 17: Walgreens email ad, October 2013
                                                                                                                                          • Strategy: Promoting the pharmacy
                                                                                                                                            • Figure 18: Walmart direct mail ad, October 2013
                                                                                                                                            • Figure 19: Target direct mail ad, October 2013
                                                                                                                                          • Strategy: Focus on services
                                                                                                                                            • Figure 20: Walgreens direct mail ad, October 2013
                                                                                                                                            • Figure 21: Walgreens “Steps with balance rewards: connect a fitness device tutorial, November 2013
                                                                                                                                            • Figure 22: CVS “MinuteClinic on Health: Protecting your family from the flu,” March 2013
                                                                                                                                            • Figure 23: CVS “MinuteClinic on Health: Healthy eating, Healthy weight,” March 2013
                                                                                                                                        • Retailers Shopped for Drug Store Needs

                                                                                                                                          • Key points
                                                                                                                                            • In-store shopping far more common than online for drug store needs
                                                                                                                                              • Figure 24: Retailers shopped for drug store needs, in-store versus online, October 2013
                                                                                                                                            • Target only major player to show any significant gender bias for drug store needs
                                                                                                                                              • Figure 25: Retailers shopped for drug store needs (in-store), by gender, October 2013
                                                                                                                                            • Walgreens primary destination for most shoppers regardless of age
                                                                                                                                              • Figure 26: Retailers shopped for drug store needs (in-store), by age, October 2013
                                                                                                                                            • Higher-income consumers shop at a variety of stores for drug store needs
                                                                                                                                              • Figure 27: Retailers shopped for drug store needs (in-store), by household income, October 2013
                                                                                                                                          • Where Prescriptions are Filled

                                                                                                                                            • Key points
                                                                                                                                              • Most fill prescriptions in stores at CVS and Walgreens
                                                                                                                                                • Figure 28: Where prescriptions are filled, by method, October 2013
                                                                                                                                              • 25-34s filling prescriptions at a range of retailers
                                                                                                                                                • Figure 29: Stores where prescriptions are filled in-store, by age, October 2013
                                                                                                                                              • Different retail choices for prescriptions based on income
                                                                                                                                                • Figure 30: Stores where prescriptions are filled in-store, by household income, October 2013
                                                                                                                                            • Items Purchased at Drug Stores

                                                                                                                                              • Key points
                                                                                                                                                • OTC and prescription medication most likely drug store purchases
                                                                                                                                                  • Figure 31: Items purchased at drug stores, in-store versus online, October 2013
                                                                                                                                                • Food/drink purchasing represents opportunity for drug stores
                                                                                                                                                  • Figure 32: Items purchased at drug stores (in-store), by gender, October 2013
                                                                                                                                                • Younger adults more likely to buy food/drink than older shoppers
                                                                                                                                                  • Figure 33: Items purchased at drug stores (in-store), by age, October 2013
                                                                                                                                                • Lower to middle income groups most likely to buy across multiple categories
                                                                                                                                                  • Figure 34: Items purchased at drug stores (in-store), by household income, October 2013
                                                                                                                                              • Drug Store Shopping Behavior

                                                                                                                                                • Key points
                                                                                                                                                  • Many are loyal to drug stores, retailers need to retain them
                                                                                                                                                    • Figure 35: Drug store shopping behavior, October 2013
                                                                                                                                                  • Women slightly savvier than men when shopping at drug stores
                                                                                                                                                    • Figure 36: Drug store shopping behavior, by gender, October 2013
                                                                                                                                                  • Older shoppers loyal, influenced by sales/special offers
                                                                                                                                                    • Figure 37: Drug store shopping behavior, by age, October 2013
                                                                                                                                                  • Sales/special offers influence shoppers of all income levels
                                                                                                                                                    • Figure 38: Drug store shopping behavior, by household income, October 2013
                                                                                                                                                • Factors that Would Encourage more Drug Store Shopping

                                                                                                                                                  • Key points
                                                                                                                                                    • Lower prices, more sales would encourage more drug store shopping
                                                                                                                                                      • Figure 39: Factors that would encourage more drug store shopping, in-store versus online, October 2013
                                                                                                                                                    • Women would shop more as a result of promotions and sales
                                                                                                                                                      • Figure 40: Factors that would encourage more in-store shopping, by gender, October 2013
                                                                                                                                                    • 18-24s impacted by price, but focused on convenience
                                                                                                                                                      • Figure 41: Factors that would encourage more in-store shopping, by age, October 2013
                                                                                                                                                    • Higher-income consumers seek quality products
                                                                                                                                                      • Figure 42: Factors that would encourage more in-store shopping, by household income, October 2013
                                                                                                                                                  • Retail health clinics

                                                                                                                                                    • Key points
                                                                                                                                                      • One quarter of consumers have visited a retail health clinic
                                                                                                                                                        • Figure 43: Retail health clinics visited, October 2013
                                                                                                                                                      • Clinic users highly satisfied with treatment, likely to return
                                                                                                                                                        • Figure 44: Use of and attitudes toward retail health clinics, October 2013
                                                                                                                                                    • Race/Hispanic Origin

                                                                                                                                                      • Key points
                                                                                                                                                        • Hispanics likely to shop at and fill prescriptions at Walgreens
                                                                                                                                                          • Figure 45: Retailers shopped for drug store needs (in-store), by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 46: Prescriptions filled in-store, by race/Hispanic origin, October 2013
                                                                                                                                                        • Blacks most likely to buy food for immediate consumption at drug stores
                                                                                                                                                          • Figure 47: Items purchased at drug stores (in-store), by race/Hispanic origin, October 2013
                                                                                                                                                        • Hispanics more likely than non-Hispanics to prefer to shop online for drug store needs
                                                                                                                                                          • Figure 48: Drug store shopping behavior, by race/Hispanic origin, October 2013
                                                                                                                                                        • Hispanics and Asians seek home delivery of drug store purchases
                                                                                                                                                          • Figure 49: Factors that would encourage more in-store shopping, by race/Hispanic origin, October 2013
                                                                                                                                                        • Hispanics more likely than other groups to visit retail health clinics
                                                                                                                                                          • Figure 50: Retail health clinics visited, by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 51: Reasons for visiting retail health clinic, by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 52: Treatment/satisfaction at the retail health clinic, by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 53: Likelihood of repeat visit to retail health clinic, by race/Hispanic origin, October 2013
                                                                                                                                                      • Appendix – Other Useful Consumer Tables

                                                                                                                                                        • Retailers shopped for drug store needs (in-store)
                                                                                                                                                          • Figure 54: Retailers shopped for drug store needs (in-store), by marital/relationship status, October 2013
                                                                                                                                                          • Figure 55: Retailers shopped for drug store needs (in-store), by household size, October 2013
                                                                                                                                                          • Figure 56: Retailers shopped for drug store needs (in-store), by employment, October 2013
                                                                                                                                                          • Figure 57: Retailers shopped for drug store needs (in-store), by generations, October 2013
                                                                                                                                                          • Figure 58: Retailers shopped for drug store needs (in-store), by repertoire of items purchased at drug stores (in-store), October 2013
                                                                                                                                                        • Retailers shopped for drug store needs (online)
                                                                                                                                                          • Figure 59: Retailers shopped for drug store needs (online), by gender and age, October 2013
                                                                                                                                                          • Figure 60: Retailers shopped for drug store needs (online), by household income, October 2013
                                                                                                                                                          • Figure 61: Retailers shopped for drug store needs (online), by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 62: Retailers shopped for drug store needs (online), by marital/relationship status, October 2013
                                                                                                                                                          • Figure 63: Retailers shopped for drug store needs (online), by household size, October 2013
                                                                                                                                                          • Figure 64: Retailers shopped for drug store needs (online), by employment, October 2013
                                                                                                                                                          • Figure 65: Retailers shopped for drug store needs (online), by generations, October 2013
                                                                                                                                                          • Figure 66: Retailers shopped for drug store needs (online), by repertoire of items purchased at drug stores (online), October 2013
                                                                                                                                                        • Where prescriptions are filled (in-store)
                                                                                                                                                          • Figure 67: Stores where prescriptions are filled in-store , by gender, October 2013
                                                                                                                                                          • Figure 68: Prescriptions filled in-store, by marital/relationship status, October 2013
                                                                                                                                                          • Figure 69: Prescriptions filled in-store, by household size, October 2013
                                                                                                                                                          • Figure 70: Prescriptions filled in-store, by employment, October 2013
                                                                                                                                                          • Figure 71: Prescriptions filled in-store, by generations, October 2013
                                                                                                                                                          • Figure 72: Prescriptions filled in-store, by repertoire of items purchased at drug stores (in-store), October 2013
                                                                                                                                                        • Where prescriptions are filled (online)
                                                                                                                                                          • Figure 73: Prescriptions filled online, by gender and age, October 2013
                                                                                                                                                          • Figure 74: Prescriptions filled online, by household income, October 2013
                                                                                                                                                          • Figure 75: Prescriptions filled online, by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 76: Prescriptions filled online, by generations, October 2013
                                                                                                                                                          • Figure 77: Prescriptions filled online, by repertoire of items purchased at drug stores (online), October 2013
                                                                                                                                                        • Items purchased at drug stores (in-store)
                                                                                                                                                          • Figure 78: Items purchased at drug stores (in-store), by marital/relationship status, October 2013
                                                                                                                                                          • Figure 79: Items purchased at drug stores (in-store), by household size, October 2013
                                                                                                                                                          • Figure 80: Items purchased at drug stores (in-store), by employment, October 2013
                                                                                                                                                          • Figure 81: Items purchased at drug stores (in-store), by generations, October 2013
                                                                                                                                                          • Figure 82: Items purchased at drug stores (in-store), by repertoire of items purchased at drug stores (in-store), October 2013
                                                                                                                                                        • Items purchased at drug stores (online)
                                                                                                                                                          • Figure 83: Items purchased at drug stores (online), by gender and age, October 2013
                                                                                                                                                          • Figure 84: Items purchased at drug stores (online), by household income, October 2013
                                                                                                                                                          • Figure 85: Items purchased at drug stores (online), by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 86: Items purchased at drug stores (online), by repertoire of items purchased at drug stores (online), October 2013
                                                                                                                                                        • Items purchased at drug stores (in-store or online)
                                                                                                                                                          • Figure 87: Items purchased at drug stores (in-store or online), by Retailers shopped for drug store needs (in-store or online), October 2013
                                                                                                                                                          • Figure 88: Items purchased at drug stores (in-store or online), by retailers shopped for drug store needs (in-store or online), October 2013
                                                                                                                                                        • Drug store shopping behavior
                                                                                                                                                          • Figure 89: Drug store shopping behavior, by marital/relationship status, October 2013
                                                                                                                                                          • Figure 90: Drug store shopping behavior, by household size, October 2013
                                                                                                                                                          • Figure 91: Drug store shopping behavior, by employment, October 2013
                                                                                                                                                          • Figure 92: Drug store shopping behavior, by generations, October 2013
                                                                                                                                                        • Coupon use at drug stores
                                                                                                                                                          • Figure 93: Coupon redemption at drug stores, by key demographics, May 2012-June 2013
                                                                                                                                                          • Figure 94: Types of coupons used at drugstores, by key demographics May 2012-June 2013
                                                                                                                                                        • Factors that would encourage more drug store shopping (in-store)
                                                                                                                                                          • Figure 95: Factors that would encourage more in-store shopping, by marital/relationship status, October 2013
                                                                                                                                                          • Figure 96: Factors that would encourage more in-store shopping, by household size, October 2013
                                                                                                                                                          • Figure 97: Factors that would encourage more in-store shopping, by generations, October 2013
                                                                                                                                                          • Figure 98: Factors that would encourage more in-store shopping, by repertoire of items purchased at drug stores (in-store), October 2013
                                                                                                                                                        • Factors that would encourage more drug store shopping (online)
                                                                                                                                                          • Figure 99: Factors that would encourage more online shopping, by gender, October 2013
                                                                                                                                                          • Figure 100: Factors that would encourage more online shopping, by age, October 2013
                                                                                                                                                          • Figure 101: Factors that would encourage more online shopping, by household income, October 2013
                                                                                                                                                          • Figure 102: Factors that would encourage more online shopping, by race/Hispanic origin, October 2013
                                                                                                                                                          • Figure 103: Factors that would encourage more online shopping, by marital/relationship status, October 2013
                                                                                                                                                          • Figure 104: Factors that would encourage more online shopping, by household size, October 2013
                                                                                                                                                          • Figure 105: Factors that would encourage more online shopping, by employment, October 2013
                                                                                                                                                          • Figure 106: Factors that would encourage more online shopping, by generations, October 2013
                                                                                                                                                          • Figure 107: Factors that would encourage more online shopping, by repertoire of items purchased at drug stores (online), October 2013
                                                                                                                                                        • Visits to retail health clinics
                                                                                                                                                          • Figure 108: Retail health clinics visited, by gender, October 2013
                                                                                                                                                          • Figure 109: Retail health clinics visited, by age, October 2013
                                                                                                                                                          • Figure 110: Retail health clinics visited, by household income, October 2013
                                                                                                                                                          • Figure 111: Retail health clinics visited, by marital/relationship status, October 2013
                                                                                                                                                          • Figure 112: Retail health clinics visited, by household size, October 2013
                                                                                                                                                          • Figure 113: Retail health clinics visited, by employment, October 2013
                                                                                                                                                          • Figure 114: Retail health clinics visited, by generations, October 2013
                                                                                                                                                          • Figure 115: Retail health clinics visited, by any clinic use, October 2013
                                                                                                                                                        • Type of treatment received at retail health clinic
                                                                                                                                                          • Figure 116: Type of treatment received at retail health clinic, by gender, October 2013
                                                                                                                                                          • Figure 117: Type of treatment received at retail health clinic, by household income, October 2013
                                                                                                                                                          • Figure 118: Type of treatment received at retail health clinic, by race/Hispanic origin, October 2013
                                                                                                                                                        • Reasons for visiting a retail health clinic
                                                                                                                                                          • Figure 119: Reasons for visiting retail health clinic, by gender, October 2013
                                                                                                                                                          • Figure 120: Reasons for visiting retail health clinic, by age, October 2013
                                                                                                                                                          • Figure 121: Reasons for visiting retail health clinic, by household income, October 2013
                                                                                                                                                        • Treatment/satisfaction at retail health clinic
                                                                                                                                                          • Figure 122: Treatment/satisfaction at the retail health clinic, by gender, October 2013
                                                                                                                                                          • Figure 123: Treatment/satisfaction at the retail health clinic, by age, October 2013
                                                                                                                                                          • Figure 124: Treatment/satisfaction at the retail health clinic, by household income, October 2013
                                                                                                                                                        • Likelihood of repeat visit to retail health clinic
                                                                                                                                                          • Figure 125: Likelihood of repeat visit to retail health clinic, by gender, October 2013
                                                                                                                                                          • Figure 126: Likelihood of repeat visit to retail health clinic, by age, October 2013
                                                                                                                                                          • Figure 127: Likelihood of repeat visit to retail health clinic, by household income, October 2013
                                                                                                                                                        • Attitudes toward retail health clinics
                                                                                                                                                          • Figure 128: Attitudes toward retail health clinics, by retail health clinics visited, October 2013
                                                                                                                                                      • Appendix – Product Categories

                                                                                                                                                          • Food and Drink categories
                                                                                                                                                            • HBC
                                                                                                                                                              • Other
                                                                                                                                                              • Appendix – Trade Associations

                                                                                                                                                                Companies Covered

                                                                                                                                                                • Albertsons Inc.
                                                                                                                                                                • Amazon North America
                                                                                                                                                                • Brooks Pharmacy
                                                                                                                                                                • Conair Corporation
                                                                                                                                                                • CVS Caremark Corporation
                                                                                                                                                                • Duane Reade, Inc
                                                                                                                                                                • GNC Corporation
                                                                                                                                                                • L'Oréal SA
                                                                                                                                                                • SAM's Club
                                                                                                                                                                • Save-A-Lot Food Stores, Inc.
                                                                                                                                                                • Shaw's Supermarkets, Inc
                                                                                                                                                                • Supervalu Inc
                                                                                                                                                                • Target Corporation
                                                                                                                                                                • Twitter, Inc.
                                                                                                                                                                • Walgreen Co
                                                                                                                                                                • Walmart Stores (USA)

                                                                                                                                                                The Drug Store Shopper - US - January 2014

                                                                                                                                                                £3,277.28 (Excl.Tax)