CVS ready to take first step into Omaha area

CVS/pharmacy has for the first time confirmed that it is entering the Omaha market — but not on a site previously announced by a local developer.

A CVS drugstore will be constructed on the site where a Timber Lodge Steakhouse stood until it was demolished in January.

The pharmacy chain, based in Woonsocket, R.I., plans to open a store in summer 2010 at the northwest corner of 144th Street and West Maple Road, said CVS spokesman Mike DeAngelis.

The move will pit the nation's two largest retail pharmacy chains against each other in a market now dominated by Walgreens, the Deerfield, Ill.,-based chain that operates more than 30 stores in the Omaha metro area.

"We are looking for other opportunities to open stores in the Omaha market," DeAngelis said. "But we don't have any specific locations to announce beyond 144th and Maple at this time."

CVS previously had declined to comment on its Omaha plans.

Never shopped at a CVS store?

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A couple of things to expect.

• One way to save: CVS sponsors a customer loyalty program that returns to shoppers 2 percent on all purchases every quarter - rewarded in coupon form. The ExtraCare program has more than 50 million cardholders.

• More CVS-brand products: The chain is factoring economic conditions into product offerings. Spokesman Mike DeAngelis said CVS has noticed increased sales of CVS-brand merchandise, so the company is introducing more house brands. Such brands cost, on average, 30 percent less than national brand equivalents, he said.

In April 2008, Jeff Keating, vice president of local property management firm PDM Inc., said CVS planned a store at the former Baker's Supermarket at 72nd and Blondo Streets. CVS late last year decided otherwise but didn't explain its decision, he said.

DeAngelis said that CVS comments only on locations with signed leases and that there is no signed lease for the 72nd and Blondo site.

CVS signed a lease in October for the 144th and West Maple site, DeAngelis said. Construction will start late this year.

A Timber Lodge Steakhouse on the site closed in December 2008 and was demolished in January, said Allan Murow, senior vice president at Noddle Cos., which will construct the building for CVS.

Noddle Cos. had been working with CVS for several years to find high-profile locations, Murow said.

CVS vs. Walgreens

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Number of stores

• CVS: 6,900 in 41 states; 4 in Nebraska (all in Lincoln, 0 in the Omaha metro area); 10 in Iowa

• Walgreens: 6,783 drugstores in 49 states; 52 in Nebraska (more than 30 in the Omaha metro area); 63 in Iowa

Number of store openings in 2009

• CVS: 300 to 325

• Walgreens: 495

Store size

• Planned CVS Omaha store: 13,225 square feet

• Average Walgreens: 14,500 square feet

Sources: Walgreens.com and CVS/pharmacy spokesman Mike DeAngelis

— compiled by Christine Laue

"We're excited that they are coming to the market," Murow said. "Given what is going on in the real estate industry nationally, it says a lot about Omaha that they feel comfortable with our local economy."

DeAngelis said Omaha was a logical expansion for CVS, which has four stores in Lincoln.

CVS is the largest retail pharmacy in terms of store count, with 6,900 in 41 states. It started as an East Coast chain and entered Nebraska in 2006 through its acquisition of the Osco drugstore chain.

In the Midwest, there are 10 stores in Iowa, 30 in Kansas, 46 in Missouri and six stores in North Dakota, he said. South Dakota has no CVS stores.

The chain has grown through acquisitions - the most recent of which is the West Coast Longs Drugs chain - but also through new-store openings, totaling 300 to 350 a year, DeAngelis said.

CVS plans to open 300 to 325 stores in 2009, he said. Of those, 175 are brand new locations, and the rest are relocations.

"When we find opportunities, you know, the right locations for the right price, we will open stores," he said.

DeAngelis said that CVS is able to grow in a recession largely because of what it sells.

"While we are not recession proof, we are to a certain degree recession resistant," he said. "Seventy percent of our business is the pharmacy business. People are still getting prescriptions filled, people are still getting sick."

On the nonpharmacy side, the average transaction is $12 or $13 - items like toothpaste that are still essential, he said.

Although CVS has more stores, Walgreens says on its Web site that it leads the chain drugstore industry in sales and profit.

Walgreens did not return a phone call Wednesday or Thursday. It operates 6,783 drugstores in 49 states, the District of Columbia and Puerto Rico and plans to open 495 stores in 2009, according to its Web site. In 2008, it opened 629 new stores. Its expansion is concentrated in California and the Northeast.

Richard Monks, senior editor of Chain Drug Review, a New York City-based trade publication, said both chains are slowing new store openings slightly but still competing with each other and supermarket pharmacies.

Walgreens and CVS tend to expand in the same regions, he said, and it makes sense that CVS is expanding in Nebraska, as it tries to fill gaps between the coasts.

"They are trying to go head to head with Walgreens wherever they can," he said.

DeAngelis said there is a perception that the chains compete by locating across the street from each other, but it's because both stores are looking for similar attributes in a store location - high visibility, high accessibility and high traffic.

"We're certainly not looking to specifically open a store near our largest competitor, and they'd probably tell you the same thing," he said.

David Kohll, pharmacist and co-owner of Kohll's Pharmacy & Homecare, which operates seven locations in the Omaha metro area, said he welcomes CVS to the market, especially if one were to open next door.

"I'm kind of excited because they generally will help me," Kohll said. "They usually take (business) from the grocery pharmacies or a big chain, or a Walgreens. But they usually send business to me because there are so many things that we do that they don't."

For example, Kohll's carries sleep apnea masks, and staff members are trained to fit them. But Kohll's doesn't develop film, so Kohll would send customers to a next-door CVS.

Especially with health care issues, pharmacists are more likely to cooperate than compete - so there is room for everybody, he said.

"We're all health care professionals in this city, and we're just trying to help the patient," Kohll said.

• Contact the writer: 444-1183, christine.laue@owh.com