Drug chains gamble on Las Vegas-and win

Drug Store News,  August 3, 1998  by Lisa T. Fried

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By aggressively pursuing prime real estate locations, focusing on service and opening mostly 24-hour stores, Walgreens is having off the chart success here in this city of hope. In the two years Walgreens has been in the market, the chain has quickly developed a reputation as a daring and aggressive retail operator here. the chain has been scouring the region for prime locations and, according to players in the market, shown a willingness to pay a premium for them.

Its most notable feat of late: securing the chain's second site on the coveted Las Vegas strip. The actual location: a center next door to the MGM Grand hotel, the largest hotel in the world. Rite Aid, Sav-on and Longs operate stores within a few miles of the strip, but not on the strip itself.

"It's important to have a presence on the strip," said Wasson. "When you are on the strip, you are advertising, not just to Las Vegas, but the world," he said, referring to the huge influx of foreigners that visit the city.

Casino employees and visitors are regular customers in Walgreens' store on the strip, which is located on Las Vegas Boulevard and Charleston. The store stocks a large assortment of T shirts, souvenirs and gifts targeted at tourist customers. And, its store personnel know that the casino workers who get off after midnight expect as good a service experience as the shoppers who come to the store earlier in the day.

"The challenge is giving the tow the service it expects and deserves," Wasson said.

Walgreen's success in the market notable for another reason. Of all the chain drug store operators here, it is the only one without slot machines in the stores. Indeed, a Walgreens store is one of the few places in Las Vegas and its surrounding communities in which one won't find a slot machine.

Slot machines are in the airport terminals, the grocery stores and even a gas stations. "It was a good decision [not to put slot machines in the stores]," said Wasson. "I get calls and letters all the time from people who are glad that we don't have them. They don't want to fight the clientele that's there or hear them clanging. And, the fact that we have done so well say we don't need them."

Most retailers with store in the region do not share Walgreens' sentiment. "Everyone has their complement of slot machines," said Prato of Longs. "It's a given." All six Longs stores in Clark County, even the four located far from the strip, have slot machines in them.

Slot machines do increase revenue at the stores, noted Panzer of American Stores, which operates slot machines in all 27 of its Sav-on drug stores here. "It's an income generator," he said. "It's like having a vending machine at the front. We have gumball machines for kids. This is a vending machine for adults."

Like them or not, retailers with stores located off the strip, which is officially called Las Vegas Boulevard, will have to remove slot machines from these stores if Las Vegas Mayor Jan Laverty Jones has her way. The Mayor wants to prohibit gaming in neighborhoods outside the strip as part of an effort to improve the quality of life in Las Vegas. At press time, the Mayor was planning to meet with community groups to discuss her plan.

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