venience products and many plan to add more easy-to-prepare food items to allow a quick, easy one-stop shopping experience for people on their way home from work (Drug Store News, 8/2/99). A significant event in the drugstore industry has been the move toward consolidation which took place throughout the 1990s. In order to generate economies of scale in distribution, buying power, corporate overhead, and the technology needed to compete for third-party prescription drug business, it has been necessary for chain drugstores to increase their numbers. This is achieved by rapidly building new stores or by buying smaller independent stores or regional chains. Their increased size results in greater bargaining power with suppliers and the ability to negotiate for better prices with third-party providers (US Business Reporter). In 1998, the top four drugstore chains, ranked by sales, were Walgreens, CVS, Rite Aid, and Eckerds. All but Walgreens significantly increased their presence by acquiring other chains during the 1990s. Walgreens accomplished this through an aggressive program of store building. These four chains account for over 50 percent of the total market share. In 1998, the ten largest drugstore chains made about 75 percent of all chain store sales and nearly 50 percent of all drugstore sales, while independent drugstores made 28 percent of all drugstore sales. The drugstore industry is facing several other problems that may have a negative impact on earnings. A shortage of pharmacists, combined with efforts to cut costs, have increased the number of hours pharmacists must work. This, combined with an increasing paperwork load has led to dissatisfaction among pharmacists. One result of this has been increased salary and benefit demands to offset the increased workload. This situation is also perceived to the cause of increased errors in filling prescriptions. The state of North Carolina has recently passed legislation...
