Coutu Says Eckerd Will Take a Lot of Work

JC already knows how to turn around a smaller business (Brooks), so the challenge is simple: can they scale up the lessons learned to the larger Eckerd business? I'm betting they can, in spite of strong competition from CVS, Walgreen, etc. The prescription market's sales are growing at a much faster rate than the economy. Seniors, the largest drug consumers, will soon buy more, due to the new Federal drug plan.

Mark Lilien, Consultant, Retail Technology Group

Coutu is certainly accurate in saying the Eckerd chain will take a good amount of time and effort to turn around. Here in northern New York State, the Eckerd name still rings as a generally overpriced drugstore, despite several changes put in place since Coutu took over. Coutu was fortunate, in some regions of NY, to have acquired relatively new free-standing properties, though several towns still have the smaller, more crowded strip plaza storefronts.

Perception is everything here, especially in terms of front-end business. With established regionals (Kinney Drugs), an ever-growing Wal-Mart presence, and a coming influx of Walgreens stores, Eckerd will need to be much more proactive in its marketing. There are few perceived laurels to rest on here; perhaps Coutu would have been better off dropping the Eckerd banner and re-branding the chain. Barring that, Coutu will be challenged to re-image the existing brand.

'mrpotter3'