GREENSBORO, NC. -- The hot topic in the Piedmont Triad is whether the area can snare a major league baseball team with a proposed new stadium.
But the competition among chain drug retailers here is already major league.
The Triad, a triangle formed by Greensboro, High Point and Winston-Salem at the foot of the Blue Ridge Mountains, is being fought over by CVS Corp., Eckerd Corp, and home-state player Kerr Drug. Phar-Mor Inc., Drug Emporium and Medicine Shoppe International have a small presence in the area, while Walgreen Co. is entering Charlotte--North Carolina's largest city--with five stores this summer.
Given Walgreens' 'inkblot' approach to growth, it's probably inevitable that the company will fill in the area between its established markets in Richmond, Va., and Tennessee by expanding into the Triad, the second-most populous region in North Carolina.
At least one person familiar with the market has no doubt that Walgreens will eventually move beyond Charlotte.
'It won't be long before it enters Greensboro,' he says. 'There's no doubt that it's on [Walgreens president and chief executive officer] Dan Jorndt's master list somewhere. It's likely to be sooner rather than later that there will be a fourth major player in the area.'
Meanwhile, CVS leads the market with a share of some 40% of drug store sales, as a result of its pickup of the more than 70 units Revco D.S. had here. Eckerd's share is in the 25% range, while that of Kerr, which has more stores in outlying areas than within the Triad, is around 10%.
Besides competing with each other, the drug chains must also vie for sales with retailers from the other mass market trade classes as well as with independent pharmacies. North Carolina-based supermarket chain Harris-Teeter Inc. operates food/drug combo stores here, as does Winn-Dixie Stores Inc. and Kroger Co. Food Lion Inc., the leader in the supermarket channel here, has no pharmacies, but the health and beauty aids aisles of its more than 60 outlets in the area provide formidable competition for drug chains' front-end business.
In the discount store arena, Wal-Mart Stores Inc., Target Stores and Kmart Corp. are all here with pharmacies, and in Kmart's case, supercenters. A Sam's Club unit of Wal-Mart provides further competition for H&BAs and general merchandise.
What has attracted all these chains is a growing area with a population of over 1.1 million--just under Charlotte's--and drug store sales of close to a half-billion dollars, which made the Triad the No. 39 drug store market in the country last year. Its location puts it squarely between two other vibrant markets--Charlotte--Gastonia to the southwest and the Research Triangle (formed by Raleigh, Durham and Chapel Hill) to the east.
The Triad, which has an international airport between Greensboro and Winston-Salem, has recently been gaining a reputation as a global business center. In 1996 it was recognized by Site Selection magazine as one of the country's top 10 commercial regions.
According to North Carolina Department of Commerce Secretary S. Davis Phillips, businesses invested more than $200 million in the Triad in 1996, making it the leading region in the nation in terms of new and expanding facilities. Northwest Airlines Corp., Medi Manufacturing and Wilson-Cook Medical are three of several international companies that have contributed to the creation of thousands of jobs.
Further employment growth is promised by the expansion of Koury Convention Center and the sell-off of Jefferson Pilot Corp.'s 400-acre reserve. And Lorillard Tobacco Co. has moved from the Big Apple to Tobacco Road with the construction of a $12 million building in Greensboro.
If the Triad's global reputation is a recent phenomenon, High Point's is longstanding. The twice-a-year International Home Furnishings Market, the largest wholesale finished goods home furnishings market in the world, has a huge impact on the economy of the city and the region. On average, 70,000 retail home furnishings buyers, furniture company executives, brokers, interior designers and members of the media attend each event.
Visitors to the April and October markets come from every state and more than 100 countries. Yearly attendance is 9,400 and participants spend $250 million in the area, not including furniture orders. The local economic impact has grown more than 160% since 1986.
Winston-Salem has kept pace with the rest of the region through major growth in the service sector, which accounts for over one-fourth of area employment. And the sector is dominated by high-paying jobs in health care, which is the largest industry in Forsyth County. The trend is likely to continue as Winston-Salem's reputation as a leading medical research and treatment center grows through such projects as the $40 million center on aging at Bowman Gray/Baptist Hospital Medical Center.
At the same time, the city is home to the headquarters of two of the largest employers in the Triad, R.J. Reynolds Tobacco Co. and the apparel division of Sara Lee Corp., which has opened a $15 million 275-worker distribution center. Meanwhile, heavy construction machinery manufacturer Deere Hitachi has completed a $20 million expansion.
And then there's the possibility of a baseball team. North Carolina businessman Don Beaver is negotiating to buy the Minnesota Twins and move the team to the state next year. Should the sale go through and the league's owners approve a relocation, and if Forsyth and Guilford County voters approve funding for a new stadium in a May 5 referendum, Beaver would move the Twins to the Charlotte area for the 1999 and 2000 seasons, and then to a permanent home in the Triad.
Meanwhile, the competition for drug store sales here is likely to be as heated as a pennant race in September. However, according to Kerr chairman, president and chief executive officer Tony Civello, there is room at the top for CVS, Eckerd and Kerr. 'All three of us can grow and be successful,' he says. 'There's enough land in North Carolina and there's enough population growth for the three of us to thrive.'
Peidmont Triad drug chains Chain Stores Market share CVS 2 40% Eckerd 36 25% Kerr 21 10% Phar-Mor 5 6% Drug Emporium 2 4% Medicine Shoppe International 4 2% Source: Racher Press research.
