A good place for Duane Reade. (Top 100 Markets).
NEWARK -- Duane Reade will open its third store in this city by early next year, says Tony Cuti, the chain's chairman, president and chief executive officer.
"The market has long-term potential," comments Cuti.
"In the medium term the city of Newark, though improving year after year, still hasn't shown the kind of rapid improvement that the Bronx or northern Manhattan is showing," he adds, referring to two sections of New York City on the rebound.
Duane Reade also has a formerly independent store in Irvington, N.J., just outside of Newark, that Cuti says has done very well.
Generally, he says, Newark and its inner suburbs are prime Duane Reade territory. That is because the area is so dense that it precludes the opening of the freestanding stores favored by megachains.
"Their ability to expand and develop in these areas is limited," he says of Walgreen Co., CVS Corp., Rite Aid Corp. and Eckerd Corp.
The region is growing, he notes, but not in the outward way that attracts stand-alone outlets with drive-through pharmacies. Instead of building sprawling malls and subdivisions, developers are replacing two-family houses and low-rise garden apartments with high-rise buildings. Jersey City, for example, is not a new town, but the buildings that make up its skyline are generally less than a decade old, Cuti notes.
"The idea is to get in there and establish oneself despite the density," Cuti says of the area. "It's only going to go from dense to more dense. It's not going to lighten up."
Indeed Duane Reade has pursued that strategy with stores along the Hudson River from Bayonne to Jersey City, West New York, Edgewater and Fort Lee. A few miles west it has units in Teaneck and Hackensack.
"That's the Duane Reade story," remarks Cuti.
"We go in when the market urbanizes, which is the very time that it creates a bar for the national chains. We have every intention of expanding in New Jersey in these dense urban areas. We've targeted quite a few markets that have a high density. We think it's a good place to go."
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|Date:||Jun 16, 2003|
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