in drugstores, 4,837 (9%) were mass merchandisers, and 6,247 (12%) were supermarkets. The mass merchandisers were the fastest growing segment. In 1995, independents made 34 percent of all prescription and OTC drug sales, chain stores made 41 percent of prescription and OTC sales, mass marketers made 11 percent of the prescription and OTC sales, and 4percent of these sales were made through mail order outlets. By 1996 there were 58,333 drugstores in the United States. Of these, 35,000 (60%) were independently owned. The deep discounting outlets, a segment of the mass merchandisers, had begun to lose market share due to other stores’ adaptation of their low price strategy (Encyclopedia of American Industry). By 1998, sales of prescription drugs through all channels rose to $103 billion. Drug chains and independents made 66percent of those sales, down from 75percent in 1995. Mail order outlet sales rose to 13percent, supermarkets sold 11percent, and mass merchandisers sold 10percent (Standard & Poors Industry Survey).Current Conditions The sales of prescription drugs jumped 7.95 percent in 1998, for an increase of $2.73 billion. The average prescription price rose by 8 percent from $35.72 in 1997 to $38.43 in 1998. The drugstore industry as a whole had a 3.3 percent increase in sales in 1998, for a total of $134.4 billion. Due to a 15 percent increase in pharmacy volume, chain drugstores did better than the average. Their sales grew 8.2 percent to $96.7 billion, which was 72 percent of the industry total. Chain drugstores filled 60percent of all prescriptions. Sales at independent stores dropped by 7.6 percent, for a total of $37.7 billion. Much of this is due to the chain drugstores receiving a greater share of business from third-party payment plans. The strong growth seen in the drugstore industry is due to several factors. The two demographic groups using the greatest amount of medication are adults over 65 and...
