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New ShopKo format heavy on food.

Discount store operator ShopKo Stores, Inc. is testing a neighborhood drug store concept near its headquarters in Green Bay, Wis. that features a pharmacy and typical front end categories, as well as an expanded food assortment and several nontraditional services. Three stores are included in the pilot.

ShopKo Express Rx averages between 14,000 and 15,000 square feet. The food assortment is a cross between what c-stores and supermarkets carry, according to Mike Bettiga, s.v.p, of retail, health/GM, HBC, and consumables. While there are several flavors of Hamburger Helper and myriad frozen dinner entrees, for example, only the dairy case contains perishables. Food is supplied by Supervalu.

A section featuring packaged, frozen, and refrigerated food occupies about 25 percent of floor space at the store in Howard, Wis.

Unlike many ShopKo discount stores, Express Rx also carries a wide variety of traffic-generating beers and wines, as well as cigarettes. There's also a dollar section comprising over-the-counter, HBC, food, and some cleaning products.

Special services in the store include an optical center (Howard store only), pharmacy (including drive-through), and business center.

The aim of ShopKo Express, says Sam Duncan, ShopKo's president and c.e.o., is to take ShopKo's long history in pharmacy, optical, and other health-related areas and segment them in a drive-up convenience setting--along with a few perks not usually found in drug and c-stores. He noted that the stores bring ShopKo into small but rapidly growing communities. ShopKo's discount stores, in contrast, are in major suburbs, while its Pamida discount stores serve more isolated rural communities.

"With the strength of our pharmacy business at ShopKo, it became clear we should do something like this," said Duncan during a tour of the Howard store.

Duncan acknowledged that ShopKo has faced some financial hurdles in its battle against Wal-Mart, and that ShopKo Express Rx could be a viable means of differentiation. But he said that ShopKo has not determined how long it will test Rx Express or what its growth potential could be.

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Title Annotation:ShopKo Stores, Inc.
Comment:New ShopKo format heavy on food.(ShopKo Stores, Inc.)
Author:Garbato, Debby
Publication:Progressive Grocer
Geographic Code:1U3WI
Date:Feb 15, 2005
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