New high quality urban format Walgreens "pharmacy" in Chicago

This ain't no 7-11. Image of Parker's Urban Market, Drayton Street, Savannah, from Yelp.

I've written quite a bit about the drive to create so-called "urban format" stores by "drug store" chains, in particular CVS.

"It only took them about 20 years to figure it out: CVS urban store format" from 2010 discusses this new format, which recognizes that as urban commercial districts have lost their convenience food stores, by default, the local pharmacy becomes in part, a "convenience store."

The urban format stores recognize this, by changing the product mix to include about 1.5 aisles of food items, including a fresh(er) food case with "grab and go" items.

Personally, I've been disappointed, not so much in the selection of products, but in the fact that for the most part the food items are priced very high, just like a convenience store... rather than being priced in a way that takes advantage of the buying volume that a retail chain like CVS, with more than 7,000 stores nationally, possesses. Maybe the prices couldn't be comparable to a reasonably priced supermarket, but ideally they'd be significantly less than a convenience store or corner market, given that the volume of a drug store company allows them to get better prices.

The Duane Read division of Walgreens upped the ante for retail pharmacy chains last summer, opening a premium version of an "urban format" store on Wall Street, with shoe salon, sushi, a high end selection of business periodicals, and other services. ("Duane Read opens big on Wall Street," Chain Store Age).

This took to another level Duane Read efforts, which in Brooklyn have gone to the extent where they sell craft beer on tap in a store in Williamsburg ("A Duane Reade in Brooklyn With a Beer Bar," New York Times).

And Walgreens is continuing to expand the use of high quality urban "convenience" store concept stores, with a newly opened store in Chicago. See "Sushi at Walgreens? New State Street store offers urban format" from the Chicago Sun-Times.

From the article:

Walgreens is trying a new approach at an old location: State and Randolph. The Deerfield-based drugstore giant is reopening Tuesday with a new format that shows just how high-end it can go, with a $450 imported wine and a $192 skin-care cream sitting amid a gleaming, well-lit smorgasbord of sushi, serve-yourself yogurt and an iPad-equipped health guide at the pharmacy clinic.

The store features ready-to-go packaged fruits and meals, a barista serving coffee, a three-person nail bar, an eyebrow-shaping service, a high-end cosmetics department and chocolates, cupcakes, cookies and beers made by Chicago companies.

This is one of those times now that I do appreciate store competition and wonder if Walgreens is considering bringing one of these high format stores to Washington, DC.

When I was in Savannah last month, I did happen across the Parker's Urban Market. Parker's is a regional convenience store chain with typical gasoline-convenience stores, but the Savannah downtown store and one other are super-high end stores, maybe not with $450 bottles of wine, but with a few thousand specialty products, ranging from hot sauce to imported cheese and serves up fresh-made breads, desserts, and meals-to-go 24 hours a day.

It's true that east coast convenience store chains Sheetz and Wawa, both based in Pennsylvania, are known for their expanded prepared food offerings, making the stores more like prepared to order fast food restaurants, as well as places to buy other goods and gasoline, but we haven't seen a lot of innovation by equivalent companies like 7-11, who tend to be more active in urban settings.

Now while I didn't want to spend $1.49 for a bagel or $8.49 for a large bottle of Siracha sauce and I didn't like that they only sold 1/2 ounce portions of cream cheese rather than an 8 ounce brick, having access to those items close by is great, not to mention the extensive beer and wine selection, book department (cookbooks by Paula Deen, etc., given that most of the tourists make her restaurants one of their stops while visiting, prepared foods, and even (ugh) gasoline.

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Another format-breaker is Tesco's Fresh & Easy concept in the West (AZ and CA mostly), which is bigger than a convenience store but smaller than a supermarket. But they've lost a billion dollars learning the U.S. market, and I am not sure how good a model this is. (See "Pushback against the 24 hour/creative city" from 2008.)

And in Texas, the regional supermarket leader is HEB. While they don't do smaller convenience store sized offerings unlike the GetGo chain from Pittsburgh's Giant-Eagle, they do some pretty amazing supermarkets, called HEB Plus, with home and garden centers called Texas Backyard, and electronics and other sections with competitive pricing. See "My H-E-B" from Progressive Grocer.

... although in the 1960s, many regional supermarket chains, including Giant in the DC region, did develop discount store divisions comparable to KMart, and had some integrated stores. Most of these kinds of store combinations and experiments ended in the 1970s.