2009 Trendology: U.S. Pharmacies & Drug Stores by TrendologyResearch

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									U.S. Pharmacies & Drug Stores Industry

          © 2009 Edition
                      U.S. Pharmacies & Drug Stores Industry
                                     © 2008 Trendology Research



TABLE OF CONTENTS

               Economic Outlook Scenario Definitions
               Economic Outlook Scenario - Estimated Number of Establishments
               Economic Outlook Scenario - Estimated Industry Sales ($Millions)
               Economic Outlook Scenario - Estimated Number of Employees
               Industry Definition and Related Industries
               Related Industries
               U.S. Census Categories
               SWOT Analysis - Internal Industry Strengths
               SWOT Analysis - Internal Industry Weaknesses
               SWOT Analysis - External Industry Opportunities
               SWOT Analysis - External Industry Threats
               Written Analysis - Financial/Industry Statistics
               Written Analysis - Human Resources
               Written Analysis - Inputs/Suppliers
               Written Analysis - Consumers/Demand
               Written Analysis - Government Regulations
               Written Analysis - Technology
               Written Analysis - Environmental
               Written Analysis - Global Situation
               Written Analysis - Mergers & Acquisitions
               Written Analysis - Earnings & Profits
               Written Analysis - Executives News
               Written Analysis - Forecasts
               5-Year Trend - Estimated Number of Establishments
               5-Year Trend - Estimated Industry Sales ($Millions)
               5-Year Trend - Estimated Number of Employees
               Major Industry Players
               2008 U.S. States - Estimated Number of Establishments
               2008 U.S. States - Estimated Industry Sales ($Millions)
               2008 U.S. States - Estimated Number of Employees
               2008 U.S. Metropolitan Areas - Estimated Number of Establishments
               2008 U.S. Metropolitan Areas - Estimated Industry Sales ($Millions)
               2008 U.S. Metropolitan Areas - Estimated Number of Employees
               Definitions and Terms




   © 2009 U.S. Pharmacies and Drug Stores Industry - Trendology Research             1
                          U.S. Pharmacies & Drug Stores Industry
                                           © 2008 Trendology Research




Copyright © 2008 By Trendology Research
Printed in USA

All rights reserved. This publication may not be reproduced, stored in any information or retrieval system
or transmitted in whole or in part, in any form or by any means - electronic, mechanical, photocopying,
recording or otherwise - without the express written permission of Trendology Research.

Note: Every effort has been made to verify and ensure the accuracy of the information within this
publication. However, if any errors exist in this publication Trendology Research disclaims any liability for
any loss or damage to any party as a result of the information or errors in this publication.




     © 2009 U.S. Pharmacies and Drug Stores Industry - Trendology Research                                      2
                         U.S. Pharmacies & Drug Stores Industry
                                         © 2008 Trendology Research


Economic Outlook Scenarios
Economic Outlook Scenarios are a unique Trendology method of projecting future industry growth or
decline. Each year when the Trendology reports are published, there are many factors that will impact
an industry in the upcoming year. Many factors would have a positive impact (termed optimistic economic
outlook scenarios) and others would have a negative impact (termed optimistic economic outlook scenarios).

Trendology Research believes these scenarios provide a useful tool for our clients so that they can 1) see
the factors that will potentially impact their industry's economy and 2) choose within a range the growth or
decline in their industry based on these economic factors.

The projections are based on regression analysis of past historical industry trends. 2006 and 2007 figures are
fixed. The 2008-2010 figures are projections are impacted by the economic outlook scenarios. 2008 figures
are impacted because at the time of publication, final data for the last months of 2008 were not available.

• Optimistic Economic Outlook Scenarios
                  1) Tax cuts remain in place
                  2) Consumer confidence continues to decline leading to a recession
                  3) U.S. dollar grows in value against competitive countries
                  4) U.S. government's economic stimulus package is effective
                  5) Housing foreclosures are minimal - mortgage companies and U.S. government solve crisis
                  6) Interest rate cuts are effective in stimulating investment
                  7) U.S. government is effective at stopping possible terrorist attacks on U.S. homeland
                  8) Oil prices decrease (supply increases or demand decreases due to conservation)
                  9) Illegal immigration decreases
                  10) Changes to trade regulation increases U.S. exports and improve trade balance




• Pessimistic Economic Outlook Scenarios
                  1) Tax increases are instituted
                  2) Consumer confidence improves or remains constant to avoid a recession
                  3) U.S. dollar continues to decline in value or remains at current value
                  4) U.S. government's economic stimulus package is ineffective
                  5) Housing foreclosures are significant
                  6) Interest rates cuts are mishandled and are not effective in stimulating investment
                  7) Terrorist attack on U.S. homeland
                  8) Oil prices continue to increase or remain at current level
                  9) Illegal immigration continues
                  10) No changes to trade regulations




     © 2009 U.S. Pharmacies and Drug Stores Industry - Trendology Research                                       3
                                                    U.S. Pharmacies & Drug Stores Industry
                                                                     © 2008 Trendology Research


Number of Industry Establishments
• Economic Outlook Scenarios

   Economic                                                          Year                              % Change from Year to Year
   Scenarios                        2006                      2007     2008       2009       2010   06-07    07-08     08-09      09-10
    Optimistic                     --                        --       43027      42966      42951   --       -1.4%     -0.1%       0.0%
      Stable                      44286                     43633     42979      42966      42951   -1.5%    -1.5%      0.0%       0.0%
    Pessimistic                    --                        --       42931      42966      42951   --       -1.6%      0.1%       0.0%

*Economic Outlook Scenarios only apply to projected years.




                                                      Industry Establishments (Stable Economy Scenario)
                                                    44500
                         Number of Establishments




                                                    44000

                                                    43500

                                                                                                       Number of Establishments
                                                    43000

                                                    42500

                                                    42000
                                                              2006    2007    2008   2009   2010




      © 2009 U.S. Pharmacies and Drug Stores Industry - Trendology Research                                                               4
                                      U.S. Pharmacies & Drug Stores Industry
                                                    © 2008 Trendology Research


Industry Sales
• Economic Outlook Scenarios

   Economic                                                         Year
   Scenarios               2006              2007     2008        2009      2010   06-07   07-08    08-09   09-10
    Optimistic            --                --      237661      264182    289478   --      12.4%    11.2%    9.6%
      Stable            194726            211525    229436      247981    266695    8.6%    8.5%     8.1%    7.5%
    Pessimistic           --                --      221211      231780    243912   --       4.6%     4.8%    5.2%

*Economic Outlook Scenarios only apply to projected years.




                                               Industry Sales (Stable Economy Scenario)
                                      300000

                                      250000

                                      200000
                         Sales ($M)




                                      150000
                                                                                               Sales ($M)
                                      100000

                                       50000

                                          0
                                                2006     2007      2008     2009   2010




      © 2009 U.S. Pharmacies and Drug Stores Industry - Trendology Research                                         5
                                               U.S. Pharmacies & Drug Stores Industry
                                                             © 2008 Trendology Research


Number of Industry Employees
• Economic Outlook Scenarios

   Economic                                                                   Year
   Scenarios               2006                       2007     2008      2009       2010      06-07       07-08       08-09   09-10
    Optimistic            --                         --      982210    980808     980474      --          -1.4%       -0.1%    0.0%
      Stable           1010940                     996025    981110    980807     980473      -1.5%       -1.5%        0.0%    0.0%
    Pessimistic           --                         --      980010    980806     980471      --          -1.6%        0.1%    0.0%

*Economic Outlook Scenarios only apply to projected years.




                                                   Industry Employees (Stable Economy Scenario)
                                               1015000
                                               1010000
                         Number of Employees




                                               1005000
                                               1000000
                                                995000
                                                990000
                                                                                                      Number of Employees
                                                985000
                                                980000
                                                975000
                                                970000
                                                965000
                                                         2006   2007   2008     2009   2010




      © 2009 U.S. Pharmacies and Drug Stores Industry - Trendology Research                                                           6
                       U.S. Pharmacies & Drug Stores Industry
                                      © 2008 Trendology Research



Industry Definition and Related Industries

NAICS 44611 Pharmacies and Drug Stores – This industry comprises
establishments known as pharmacies and drug stores engaged in retailing
prescription or nonprescription drugs and medicines.

Related Industries
                Biotechnology & Drugs
                Major Drugs
                Retail (Catalog & Mail Order)
                Retail (Department & Discount)

U.S. Census Categories
NAICS 44611 – Pharmacies and drug stores is 100% comparable to
SIC 5912 - Pharmacies and drug stores




    © 2009 U.S. Pharmacies and Drug Stores Industry - Trendology Research   7
                         U.S. Pharmacies & Drug Stores Industry
                                          © 2008 Trendology Research



Internal Industry Strengths

• Technology such as automatic dispensers for prescriptions and state-of-the art computer systems allows for
increased efficiency and a decrease in pharmacists' hours. Drug stores that use state-of-the art software can have
all information listed in their database regarding side effects of drugs, and multiple and conflicting prescriptions.
• According to IOMA research reports, the rise in health care spending is connected to the increase of spending
money on drugs, with demand for certain drugs growing, changes in lifestyles that require certain drugs, and the
population of aging Americans who require certain prescription drugs.
• Merchandise located in the front of a store generally accounts for between 40 - 65 percent of sales. This is a
higher percentage of revenue than prescription drugs, which average nearly 50 percent of sales.

Internal Industry Weaknesses
• The drug store industry is currently facing a shortage of qualified pharmacists, pharmacist assistants and
technicians.

• The drug store industry is highly concentrated; the 50 largest companies hold close to 70 percent of the market.
• Recent reports of detectable levels of pharmaceuticals indicated that drinking water contained toxic chemicals
from improperly disposed-of drugs. One solution may be to construct "ben
								
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