Inside Perspective: USA Drug closures

Independent pharmacists in Northwest Arkansas expect to benefit from Walgreens recent efforts to increase its market share by closing six local USA Drug stores in the next two months.

USA Drug employees were notified Monday (Sept. 10) of the pending store closures in Fayetteville, Springdale, Rogers, Bentonville and Siloam Springs. Insiders estimate the closures involve about 50 local jobs – some of which could be absorbed by other pharmacies in the region.

The closures by Walgreen Co. include 76 USA Drug-afiiliated stores as the $438 million acquisition of Stephen L. LaFrance Pharmacy is completed in the next two months.

“After careful planning and market analysis, on Monday we began to notify employees of our intent to close certain stores, including a number in Arkansas, Tennessee and Mississippi ,” Walgreens spokesman Jim Graham said. “Our decisions about store closures are based on a number of considerations, including size of the market and proximity to other Walgreens and USA Drug stores and affiliates.”

Walgreens operates nine locations in Benton and Washington counties and one more store is under construction on Sunset Avenue in Springdale.

Pine Bluff, Ark.-based LaFrance owns 144 stores operating as USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse. The stores are located throughout Arkansas, Kansas, Mississippi, Missouri, New Jersey, Oklahoma and Tennessee. LaFrance recorded estimated sales of $825 million last year.

James Graham owner of Cornerstone Pharmacy in Bella Vista said USA Drug was the last large regional chain left in the state – the 10th largest in the country.

He said Walgreens’ model has always been “buy up the competition” and he along with other independents routinely get calls from the drugstore giant about the possibility of selling out.

Independents like Cornerstone and Harp’s could also see benefits from the USA Drug closures, according to Graham. (He is not related to the Walgreens’ spokesman with same name.)

“Walgreens is essentially buying the prescriptions, but they know they won’t likely keep all of them as some will scatter to wind. When Medicap pharmacy was bought and closed by Walgreens three of four years ago it created an entry point for me to open my own independent store. Every time local pharmacies close our business grows too because not everyone wants to trade with large chains,” James Graham said.

Mel Collier, a fourth generation family pharmacist with Collier Drug, says he really doesn’t have a benchmark to measure against the USA Drug closures. 

“It’s the biggest one we have seen in this immediate area and we can only hope customers who are looking for an alternative to Walgreens will consider us,” Collier said.

He said 25% of his family business involves home delivery, and last year Collier delivered 33,000 prescriptions to its loyal customer base.

Like Cornerstone’s Graham, Collier said Walgreens has repeatedly courted his family business.

“I tell them that I have 72 employees who would have to retire if I sold out and that isn’t going to happen.” Collier said.

Graham said there is some excess capacity across the state among licensed pharmacists. Prior to opening Cornerstone Pharmacy, Graham taught pharmacology at Henderson State University.

“For 15 years we had a shortage of pharmacists but schools across the nation increased the numbers of graduates and about a year ago that gap was filled. There is a little bit of a glut,” he said.