Becoming a stronger pharmacy player

A year ago, Fred’s Super Dollar was looking for buyers. Today, Fred’s Super Dollar has become the buyer having most recently acquired the specialty pharmacy business EntrustRx. While the southeast discounter generated moderate year-over-year sales growth of 1.6% for fiscal 2014, the company has its future square in its sites with an emphasis on pharmacy and specialty pharmacy. Fred’s has projected sales growth in the coming fiscal year to eclipse 10%.

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Pharmacy is integral to those growth projections and today accounts for 44% of Fred’s business. In 2015, Jerry Shore, Fred’s Super Dollar’s freshman CEO, expected Fred’s pharmacy business, both retail and specialty, to make up more than 50% of Fred’s revenues.



“Our pharmacy business, which continues to be our most profitable department of Fred’s, grew at an even faster pace in 2014,” Shore told analysts in March. “During the year, we improved our penetration of stores with pharmacies from 52% to 58% at year end,” he said. Ultimately, Fred’s wants a store base that consists between 65% and 70% retail pharmacies.



To that end, in the past six months Shore has amassed a team of proven retail executives, with experience spanning across the dollar channel, retail pharmacy and mass. Fred’s named Mike Bloom president and COO in January. Bloom comes to Fred’s from Family Dollar and CVS Health. In March, Shore and Bloom rounded out the senior executive management team with the addition of Walgreens veteran Bryan Pugh and the promotions of Craig Barnes, a one-time AutoZone executive, and Mike Holligan, who got his start with Walmart.



Fred’s isn’t forgetting its dollar channel heritage. “We perform a role in these rural markets that is very important for the consumer,” Bloom said. “I see us being a very strong [dollar store/ pharmacy] hybrid model, with a great pharmacy business [and] a strong health-and-beauty aid business. But it’s very important that we balance that with that general merchandise [selection].”