A Drugstore/Bar Grows in Brooklyn

Jan 17, 2011

Trying to buffer the disdain for "chains" by many local
residents, Duane Reade literally raised the bar in its recent move into the
Williamsburg section of Brooklyn, home to many young hipsters and liberal yuppies.
The location includes a beer bar.

Consumers can’t hang out and drink on the
premises. But the beer bar — featuring nine local, craft and imported beers
— allows tastings and sells growlers, dark glass bottles popular in the 19th
century as a way to carry draft beer home after work. Growlers have reclaimed
some popularity after Whole Foods and some local bars recently began to offer
them, according to an article in The New
York Times
. And as long as the growlers are sealed in the store, Duane
Reade does not need any additional licenses.

Behind a bar, a sizeable walk-in
refrigerator stocks some well-known national brands as well as local, craft
and imported beers, such as Chimay and Porkslap.

The Times article noted that Duane Reade, bought
by Walgreens last spring, has attempted to cater to locals in other neighborhoods.
It sells cut flowers for some residential areas of Midtown East in Manhattan.
More items from Goya are sold in heavily Hispanic neighborhoods in the Bronx.
Sandwiches and other fast lunches are more widely available at stores near
Penn Station and the Port Authority.

"With each of our newer stores, we’re trying to find what works
in our community," Paul
Tiberio, senior vice president for merchandising and marketing at Duane Reade,
told the Times. In Williamsburg, bloggers and Facebook
groups had rallied against the pending arrival that landed across the street
from the mom-and-pop Kings Pharmacy.

"The opposition was coming from blogs, but it was more the concept of
Duane Reade or what they thought Duane Reade was going to be here," said
Paul Clark, Duane Reade’s vice president for marketing.

Selling a wide
selection of beer, along with groceries, enabled Duane Reade to fill a need
rather than just propose a threat.

"Kings is a great pharmacy — the void we saw is there’s no
food and no beer selection," Mr. Tiberio told the Times.

"I think as big chains go, they’re doing they’re best," one
resident told CBS New York. "It’s good to try to notice what
the neighborhood wants and if they can do it, it would make me more interested
in shopping there."

Discussion Questions: What do you think of Duane Reade’s move to overcome “chain” resistance in Brooklyn? What are other chains doing to find a way to bond with locals?

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8 Comments on "A Drugstore/Bar Grows in Brooklyn"

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Steve Montgomery
11 years 5 months ago

Many retail chains are adapting their category and product mix to the local areas in which they operate. In some cases they are adding categories such as mentioned in the article in others it is adding items to the categories. What makes this more realistic is having the information on which to base these decisions and that comes for both internal sales and syndicated data.

Other ways chain have worked to overcome resistance is to buy and sell local items. In some cases this is simply buying the same items (example produce) but from a local supplier. In other cases it is buying locally produced items that are unique to the market.

Regardless of the approach the goal is the same–to get people to see the store as not part of a large chain but as theirs. When people start talking about “my” store in a positive way then the chain has achieved localization.

Charlie Moro
Charlie Moro
11 years 5 months ago

Duane Reade can be credited for taking the opportunity to enter a market where there may have been real or perceived barriers of consumer acceptance; they created a twist of their offering and differentiated themselves and were able to point to something they added to the market rather than trying to replace something in the market.

David Biernbaum
11 years 5 months ago

The success of the beer bar inside a chain drug store is yet to be determined, however, what I think is more important is how much disdain there might be for chain drug stores in the New York market. Chain drug stores need to become much more unique from one another and to their neighborhoods. Easier said than done but it will happen if the politics and schematics, and even the product selection, are allowed to be more local, not less.

SKU rationalization has contributed to a certain sameness that has made chain drug store shopping boring and far too basic. Too many choices have been taken away from the consumer. I don’t know that beer bars are the answer but hey, it’s a start, I suppose.

Ben Ball
11 years 5 months ago

This seems to be more about adding local and unique beer offerings than a “bar”–and that’s probably a good thing. Adding a beer bar in and of itself probably wouldn’t go very well. On the other hand, adding unique and localized offerings may be just what the home town hero needs to crack the “no chain zone.”

Best Buy tried a dedicated beer bar and gaming/HD TV concept a few years back in some of the trendier Chicago neighborhoods and it didn’t really fly. So if it’s not cool to drink while playing video games with your friends or watching the Superbowl in High Def when HD was cool–how cool could it be to hang out in a drug store?

Lee Peterson
11 years 5 months ago

Well, they call them ‘hipsters’ not only for the look, but also because they’re hip, right? In that case, buying beer at a company owned by Walgreens is well, not very hip.

I think DR/WAL should get a “nice try” for that effort, then go back to trying to sell fresh food, probably a better margin and brand opportunity all the way around.

Ralph Jacobson
11 years 5 months ago

Whether or not this has been tried in the past is less relevant than the store trying to differentiate from competitors. That is the key. Try it! See what happens! Learn from the past experiments of other retailers and make it better! Listen to customer comments and sentiments. Search the web for social media outlet posts about the experience. This can definitely generate business!

Geoffrey Igharo
Geoffrey Igharo
11 years 5 months ago

The thing is, Williamsburg is actually well served with small mom-and-pop corner stores/delis that have a pretty good beer selection. And that goes back for many years. I remember as long as 10 years back when it was rare to find Polish and Czech beers in NYC corner stores, you could find them at these small delis in Williamsburg.

So at the end of the day what Duane Reade is adding is the jugs of tap beer. Not the local beers or craft beers in general.

So one should still ask on a broader level whether Duane Reade is adding anything meaningful to offset the money that it is pulling out of the community (these local small business owners) and putting into the pockets of the venture capital owners of Duane Reade. It’s questionable, in my opinion.

Graeme Spicer
Graeme Spicer
11 years 5 months ago

I’ve been watching with interest the renaissance of Duane Reade. The process began with the hiring of John Lederer from Loblaws in Canada, and seems to be continuing under Walgreens’ leadership since Lederer’s departure in August.

DR was probably one of the worst retailers in NYC in 2007. Small stores with awkward layouts (a legacy of a previous real estate strategy of taking odd shaped spaces at a discounted rent) and poor merchandising, DR is now (in my opinion) one of the best drug stores in the US. I see this new neighbourhood strategy as a continuation of the organization’s desire to get closer to their customers and provide cleaner, better organized environments.

I’m bullish on DR’s potential in the coming months and years.


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