Coutu Says Eckerd Will Take a Lot of Work

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Sep 16, 2005
George Anderson

By George Anderson


When Jean Coutu Group took over Brooks drugstores, it took five years to get the newly acquired stores up to spec. It will “only” take three years for the chain to achieve the same feat with the Eckerd chain.


Michael Coutu, chief executive officer of Jean Coutu Group, said of Eckerd: “We have a lot of work to do.”


According to the Canadian Press, Mr. Coutu offered a laundry list of items that need to be addressed, including shoplifting, store layouts, advertising and supply chain issues.


Shoplifting is a major cause of concern. In Eckerd, shoplifted items represent 3.2 percent of sales. At Brooks, the same number is one percent.


Moderator’s Comment: What do you see as the future challenges/prospects for Jean Coutu Group/Eckerd?


Interestingly, the article on the Canadian Business Web site said Jean Coutu Group is not ruling out further acquisitions in the U.S. or Canada.
Any other businesses that might be acquired would have to be within reach of its current distribution network in Quebec or the Eastern U.S.

George Anderson – Moderator

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2 Comments on "Coutu Says Eckerd Will Take a Lot of Work"


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Mark Lilien
Guest
15 years 5 months ago

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.

Warren Potter
Guest
Warren Potter
15 years 5 months ago

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.

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