Katz rolls out Rexall store concept with rebranded Ontario flagship

Drug Store News,  Oct 10, 2005  by James Frederick

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TORONTO -- Katz Group Canada's Pharma Plus Drugmarts division has a new look and a new name.

Katz held a grand opening Sept. 23 for a new, fully redesigned flagship store for its Ontario-based Pharma Plus division. Built along the lines of the chain s year-old Rexall drug storeprototype, the store has een re-branded as Rexall Pharma Plus as part of a long-term effort by Katz Group to consolidate its core pharmacy banners under the Rexall logo.

Located at the heavily trafficked corner of Yonge Street and Melrose Avenue in downtown Toronto, the store is expected to draw crowds of pedestrians because of its location in one of Toronto's trendiest intown neighborhoods.

Over the past year, Katz Group has converted or built 39 drug stores in line with its new Rexall prototype, which debuted in Edmonton, Alberta, in August 2004. As the first prototype Rexall store opens in downtown Toronto, said Katz Group president Andy Giancamilli, "It becomes our flagship."

When the new, 10,000-square-foot concept store opened last year, company officials touted it as the model for future expansion and renovation of all its existing drug store operations. With its strong focus on pharmacy and health, private consultation office for patients, larger assortments and improved sight lines, the new concept stores have proven a smash with Canadian consumers, with double-digit sales gains. In general, the new units feature wider aisles, expanded planograms, a stronger focus on health and nutrition and a new and more upscale cosmetics arena. Many stores also feature dermatology centers with the cosmetics departments.

Katz has pledged to continue an "aggressive" expansion of the format, with plans to renovate or build another 40 to 50 Rexall prototype stores over the next year.

The rebranding of Pharma Plus and Katz's other corporate holdings, including Herbies' Drug and Food stores, is a gradual but determined process, Giancamilli said in an exclusive interview. In all, Katz operates 355 corporate-owned stores across Canada and provides marketing and merchandising services for some 1,500 independently owned stores under several banners.

What we are trying to accomplish is changing our name to Rexall," he told Drug Store News. "But Pharma Plus is such a recognizable brand in the Ontario and Toronto market, it's very difficult to just replace all the signs in one night. Instead, we're doing a gradual change from Pharma Plus to Rexall Pharma Plus to eventually just Rexall. And we're using electronic media--TV and radio--to tell people we are changing.

The independently owned stores within Katz Group's retail service network, which operate under the Guardian and IDA drug store banners, will remain under their former logos. But even those stores will be "part of the Rexall family of pharmacies" through the Rexall private brand found across all of the company's retail banners and through a deliberate campaign to tie those banners more directly with the Rexall brand identification.

Besides having a larger, 10,000-square-foot footprint, the new-store format "allows us to [do] assortments and planograms, which in the past we've been a little remiss at because all our stores had such different footprints," said Giancamilli. "For example, most of our stores had a 4-foot deodorant planogram. In the new stores, we have 12 feet. So we're putting more product in front of the customer. Besides pharmacy, anchor departments for the new prototype include OTC products, HBA, cosmetics and convenience foods and GM.

Ontario consumers already are familiar with the Rexall logo, which appears not only on a growing number of new stores, but also on Katz's private label products across all of its retail divisions. Last year, Katz also purchased a 10-year contract for the naming rights to a new world-class tennis arena and complex that hosted most of the biggest names in men's tennis when it opened last summer when it hosted the Tennis Masters tournament. Katz's choice for a name: the Rexall Centre.

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