PROFIT PRESCRIPTIONS; THRIFTY, SAV-ON OWNERS TO RAISE STAKES WITH DOSE OF REJUVENATION.

Byline: Ben Sullivan Daily News Staff Writer

A battle is looming for the hearts, minds and wallets of local consumers as the West Coast's two largest drugstore chains begin aggressive expansion campaigns in the Los Angeles market.

Rite Aid Corp., the latest owner of the 68-year-old Thrifty-Payless Drug chain, and American Stores Inc., which owns Sav-on, each have announced plans to open dozens of new stores in Los Angeles County and to spend millions of dollars renovating their existing stores here over the next two to five years.

It is a battle for market share that each company says it is determined to win. And with good reason: The Los Angeles metropolitan region is the second-largest market for the $125 billion worth of prescription drugs, over-the-counter medicines and health and beauty aids that U.S. chain drugstores sell each year.

For American Stores, the expansion and renovations are part of a strategy to secure and build on the dominant 32 percent market share that Sav-on's 72 local stores control. For Pennsylvania-based Rite Aid, it is a struggle to return the once-flourishing but now dowdy Thrifty chain to a lead position in the town where it was born.

``Our stores can do better,'' said Rite Aid spokeswoman Suzanne Mead. ``They can do very much better.''

Nowhere is the struggle between the chains more evident than along Ventura Boulevard near Topanga Canyon Boulevard in Woodland Hills. At sprawling Warner Plaza, a Thrifty Drug store has been selling ice cream, Timex watches and prescription drugs to locals for 30 years. Because of its location and longevity, the store does a brisk trade, dominating neighborhood drug sales.

But like many area Thrifty stores, the Warner Plaza outlet has a dated interior, with dingy lighting and a sometimes confusing juxtaposition of goods.

It is just the sort of store Mead says Rite Aid plans to renovate from floor to ceiling.

And now there's added urgency. Earlier this summer a sign went up down the street at the site of a paint store. Construction equipment soon followed, and the message of both was clear: Coming this winter - Sav-on.

American Stores spokeswoman Judie Decker said the location is not meant as an overt challenge to Thrifty, but that Sav-on will work to be the neighborhood's drugstore of choice.

``This is an important (local) market for us and we put a lot of emphasis on acquiring good sites,'' Decker said.

Rite Aid's Mead acknowledged that as Salt Lake City-based American Stores ramps up its Sav-on expansion, older Thrifty's will be at an initial disadvantage. American Stores is slated to open seven new Sav-on stores in Los Angeles by year's end and will add pharmacies to all new and many existing Lucky grocery stores, a chain the company also owns.

But, said Mead, Rite Aid has its own plans. The company will open eight new stores in Los Angeles in the next 12 months, or about 40 percent of the chain's new West Coast locations.

Rite Aid's plan kicks into a higher gear next year, with 60 new West Coast stores planned for 1998, and 100 new stores in each of the five years thereafter.

Rite Aid also plans to renovate each of its existing Los Angeles Thrifty stores, Mead said, an even more herculean task than the new construction. The chain has had four owners since 1996, and its most-recent owners, the Los Angeles-based investment group Leonard Green and Partners, spent minimally on renovations, Mead said. Rite Aid paid Leonard Green $1.4 billion for the chain.

``Obviously they were not putting a lot into it because there's a lot for us to do,'' she said.

Mead said Rite Aid has ``very firm and aggressive plans in West Coast markets in general, and particularly L.A. for redesigning the stores, refitting the interiors as well as aesthetically improving the exteriors.''

Ironically, the big loser in Rite Aid's effort will be the Thrifty name itself. Beginning this year, and continuing into 1998, all Thrifty stores will be renamed Rite Aid, Mead said. By fall 1998, she said, the only sign of the old Thrifty name will be on the chain's trademark ice cream.

While arguably a blow to Los Angeles nostalgia buffs - the Thrifty chain got its start in downtown Los Angeles in 1929 - the move is probably smart, according to Marie Griffin, editor of Drug Store News, an industry trade journal.

In the past, she said, ``The Thrifty track record certainly was the worse of two chains, but Rite Aid knows how to operate drugstores.''

Subsuming Thrifty stores under the Rite Aid name will make it easier to advertise the stores, she said, and will give consumers a clearer brand awareness.

Still, Griffin acknowledged, Rite Aid has its work cut out for it.

``Basically, people think they'll be able to do a better job than the last several owners before them, but they have a large task before them. . . . Of the two chains, it's not in great condition.''

DUKING IT OUT

For years, Thrifty-Payless and Sav-on drugs stores have been slugging it out in the competitive Los Angeles chain drug store market. Here's a look at each:

Thrifty-Payless

Parent: American Stores Co.

Headquarters: Salt Lake City, Utah 

Stores:

Nationally: 1,695

In greater L.A.: 292

Employees: 127,000

1996 revenue: $18.7 billion

Sav-on

Parent: Rite Aid Corp.

Headquarters: Camp Hill, Pennsylvania 

Stores:

Nationally: 3,600

In greater L.A.: 72

Employees: 73,000

1996 revenue: $6.9 billion

CAPTION(S):

2 Photos, Box

Box: (Color) DUKING IT OUT (See text)

Photo: (1--Color) No caption (Prescription drugs)

(2--Color) The Thrifty-Payless and Sav-on drug store chains each have announced plans to open dozens of new stores and to spend millions of dollars in renovations.

Gus Ruelas/Daily News