Unique Offerings Increasing Revenue

September 25, 2019

Some pharmacies are now serving coffee and other refreshments. 

Pharmacies were once known for their soda fountains, with customers enjoying a cherry coke or root beer while they waited, catching up with neighbors, reading the paper or just taking a breather from their day. 

While you don’t see them that much today, there are still some pharmacies that add a coffee shop or small restaurant to their business model, evoking memories of that simpler time gone by. Not only do food and drink offerings please people, they often give them reason to come back and become regular customers of the pharmacy.

Wall Drug Store in Wall, SD, started as a simple pharmacy in 1931, but transformed into a major tourist attraction thanks to the forward thinking of original owners Ted and Dorothy Hustead. The drug store started offering free water and 5 cent coffee to travelers on their way to Mount Rushmore, and soon the store added a souvenir shop and restaurant. Over time, the store expanded to more than 76,000 square feet and added other attractions such as an art gallery, mall, and kid’s park. 

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Today, under the ownership of their grandson Rick Hustead, more than two million visitors come into town to see the historic pharmacy, grab a bite to eat and a cup of coffee-still for just a nickel.

It’s a business model that has been replicated by many pharmacies over the years. 

A Tasty Treat

Tim’s Pharmacy in Yelm, WA, celebrated its 100th anniversary this summer. For most of that century, it’s offered some sort of refreshments. The latest offering is a combination coffee shop and ice cream parlor called Holy Grounds, which opened in March of 2011.

The pharmacy is now owned by the Quinby family, who purchased the operation last November. One of the main draws of the business was the Holy Grounds parlor.

“Many customers enjoy the nostalgia. They remember a time when their local pharmacy had a soda fountain and ice cream, and that helps to bring people in,” says Will Quinby, pharmacist and co-owner of Tim’s Pharmacy. “For some of our younger customers, they enjoy the idea of a classic pharmacy with a soda-fountain. We also make a point to serve high-quality coffee and ice-cream at a good price.”

The Quinby family sees the coffee shop as a “service asset,” and look for opportunities to serve their customers in unique ways that the other pharmacies are unable to match. For instance, it offers made-to-order lattes and coffee, ice cream, milkshakes, and a limited number of food items such as pre-made sandwiches, pretzels, and cookies.

“We have many customers who enjoy the uniqueness of Holy Grounds,” Quinby says. “We offer higher-end coffee and ice cream, so our customers know they are receiving high-quality at a good value.”

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One of the secrets to success, he shares, is that it’s imperative to have employees who understand their role in the coffee shop. 

“They must be friendly and approachable. It is very useful to have coffee employees with outgoing personalities that can help recognize service opportunities,” Quinby says. “It is also beneficial to find ways to keep those coffee employees busy throughout the day doing other tasks, but visibly ‘available’ to serve customers in the coffee shop.”

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Even though people sometimes come in for the ice cream and coffee, Tim’s Pharmacy is a pharmacy first, and that’s the business’ mantra. 

“In everything that we do, it is important for the staff to understand that the purpose of the coffee shop is to drive business to the pharmacy and serve those customers first and foremost,” Quinby says. “The coffee service is a perk; having employees that understand and appreciate its role within the pharmacy can be a challenge.”

Another challenge, according to Quinby, is some of the regulatory aspects of operating a food service, which are unique and outside the typical realm of a pharmacist. 

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When My Pharmacy opened in Hillview, KY, in 2016, owner and pharmacy manager Rebecca Hernandez chose to offer coffee and tea to her customers while they waited for their prescriptions to be filled. 

“It doesn’t require too much space and we already lease the entire store, so I wanted to put the space to use the best that I could and make money,” Hernandez says. “There’s a large family practice a few doors down from us, so a lot of customers come in here to wait and grab a cup of coffee.”

The pharmacy has a full menu of offerings, including Bora organic coffee, espresso, hot chocolate, iced coffee, lattes, and more. 

“Everyone who works here-my technicians and myself-chips in to help serve, so I didn’t need to hire anyone else,” Hernandez says. “Everyone really loves it and I think it definitely keeps us on the mind of people when they need a pharmacy to go to.”

New to the Game

Ann Deaton Redding opened Crossroads Pharmacy in Smiths Station, AL, in March of 2018, bringing a brand-new type of pharmacy to the area.

“I’ve practiced for 29 years and I’ve always been a chain pharmacist, but I was tired of treating people like a number, and I wanted to see people as they are,” she says. “My husband and I decided I needed to start my own pharmacy and while we were coming up with a business plan, we decided to offer some type of food element in front to help bring people through the doors.”

Originally, Redding considered having some sort of restaurant, but that seemed to require a little too much involvement, so she reduced the idea down to a coffee bar. In her mind, the coffee bar to people in 2019 is akin to the soda fountains of 50 and 60 years ago and helps her overall business. 

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“We pretty much have a mini-Starbucks in here, and we make almost anything they, or any of the other big guys, can make,” she says. “We took our staff to barista school to be trained, so they know how to work all the machines properly because we didn’t want to have a staff of people who didn’t know what they were doing. We wanted to be as good as the major coffee players in the game.”

It helps that in the town of Smiths Station, there’s not any really good specialty coffee shops, and the closest ones are at least 20-30 minutes away. 

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“We thought it was time to bring a high-end atmosphere to where we are and the coffee bar has really added into that,” Redding says. “The way pharmacy is now, compared to how it was 10 years ago, you need to find something else. A new spin to be profitable. An independent pharmacy isn’t going to survive today just from prescriptions.”

The biggest challenge with achieving success has been to change people’s mindset about pharmacy and the corporate mentality.

“People pretty much channel to big chains like Walmart or Walgreens because they have big money and can hound people with repetitive ads, which draws people in,” Redding says. “We need to get people thinking more about the community pharmacy and the benefits it offers. We try to greet everyone and have one-on-one personal interactions.”

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Crossroads Pharmacy relies on word of mouth and social media to get the word out about its great coffee and even better service. Redding has also done some local radio and TV spots to up the marketing a bit. 

“When we first started, it took a while for business to get ramped up, but today, probably 40 to 50% of our pharmacy customers get something, whether it’s a smoothie, a frape, coffee, or some pastries that we bring in from a local bakery,” Redding says. “The key is, it’s all about the experience. I wanted to provide a relaxing atmosphere where people could walk in and not feel like they were in the rat race-even if it was just for 15 minutes.”

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