MMR: Mass Market Retailers, January 11, 2021

NEWS LIFETIME ACHIEVEMENT AWARD Panzer Hailed for Nearly Five Decades in Retail Pharmacy BOISE Idaho Since going to work at an Osco Drug store in Chicago as a 15 year old high school student in early 1972 Mark Panzer has been a force in retail pharmacy With hard work and the inspiration of role models Panzer carved out a career in retailing that the editors at Mass Market Retailers are honoring with the publications Lifetime Achievement Award Career highlights include a rescue of Rite Aid Corp the launch of an e commerce platform at Pharmaca Integrative Pharmacy Inc and the mentoring of many colleagues some of whom went on to fill prominent positions in retail and other business sectors Ive had a blessed career Panzer said in an interview Its all been a very positive experience the friends the contacts made and the lesson learned Its been outstanding and I wouldnt change a thing No regrets having picked a career in the food and drug industry Its all been a very positive experience Outside of newspaper routes he began as a second grader and working as a laborer for his familys plumbing business Panzer has worked exclusively in retail His first employer was Jewel Cos Osco Drug which was purchased by American Stores Co owner of supermarket and drug store chains operating under such banners as Jewel Osco Acme Star Markets Skaggs Osco and Sav on Drugs I had a lot of great mentors who pushed me along when I was a kid coming out of college through early corporate positions store manager district manager and into senior level executive roles in operations merchandising marketing and real estate he said American Stores had superior training programs particularly the food drug store and general merchandise business Everything from P L training to how to treat and train employees how to mentor people and all the basics of retail Across the organization we all had one common goal to be the best in the food and drug store industry The Osco Drug corporate team assembled at Oak Brook Ill in the shadow of Walgreens was the best team in retail that I ever worked with Panzer said Walgreens was much bigger but our goal was not only to compete with them but to be better than Walgreens Panzer joined Albertsons in the late 1990s when Albertsons acquired American Stores He left Albertsons in 2001 and joined longtime Albertsons executive Bob Miller at Rite Aid where Mark Panzer they teamed up with Mary Sammons Jim Mastrian John Standley and others in the first Rite Aid turnaround campaign The leadership team and associates ended up basically taking the company from being bankrupt to keeping it on the map keeping it as one of the Big Three in the retail drug store industry Panzer said We had a great team with a great plan and we executed well against that plan We had the benefit of having a group of dedicated associates and a lot of support from our great vendor partners Panzer left Rite Aid in 2008 to become chief operating officer at Boulder Colo based Pharmaca Within six months he was promoted to president and chief executive officer at the company which operated retail pharmacies and health centers in five Western states as well as an ecommerce site A milestone at Pharmaca was the development and launch of Pharmaca com a do it yourself project started in the back room of a store by the Pharmaca team none of whom had much experience in digital retail It was so successful that we had to move to a warehouse location within months We did everything from scratch laying out and installing the used warehouse racking to designing and setting up the flow for picking sorting packing and shipping lines Wed receive and restock the DC slots as a team executives office personnel and the DC team After 18 months the DC was also supporting and replenishing our stores so we had to expand the facility said Panzer With startups you have limited resources so you have to work harder and smarter We made mistakes but how quickly you recover and learn from mistakes is the key to success Starting and succeeding in setting up an e commerce business and a self distribution DC with the Pharmaca Team was very rewarding Panzers grandmother and mother were role models Both were super intelligent but it was their work ethic and belief that theres nothing you cant do if youre willing to put in the time and effort he said I also had many mentors throughout my career that enabled me to move into increasing roles and responsibilities I will forever be grateful to those mentors Maher Mannschreck Young Tripp Miller Miles and Schoenbeck Growing up in the inner city on Chicagos North Side and attending public schools provided the street knowledge that Panzer credits for his ability to work with all kinds of people Say what you will about Chicago public schools but you get out of it what you put into it Lane Tech High School afforded me an excellent education I qualified to get into Lane Tech a magnet high school and graduated from Loyola University with an MBA in Finance Growing up in the inner city provided me with a lot of life experiences he said I grew up just outside of the Lathrop housing projects and spent a lot time at the Lathrop Boys Club and Hamlin Park playing baseball football and basketball You interact with a lot more people in an urban environment I think one of the problems with society today is that theres not as much time to interact on a personal level with people and neighbors as I had growing up in Chicago It was a great town to grow up in in a neighborhood that was ethnically diverse Its that Midwest work ethic respect for your neighbors and others that I believe has guided me throughout my career Looking ahead at the drug store industry Panzer sees the Panzer started his career at age 15 at an Osco drug store in Chicago continued development and adoption of the vertically integrated health care models such as Kaiser and CVS Aetna Retail Pharmacies and retail clinic locations will be incorporated into these vertically integrated health ecosystems Its the only model that will work long term given the current reimbursement models that are detrimental to the retail pharmacy industry Pharmacists and pharmacies whether independent or chains have to continue to look for new revenues he said Ive been in retail for 48 years now and the landscape is continually evolving Weve gone through the big box and category killers and the continued acceleration of e commerce which reduced and narrowed the drug stores and grocery stores focus on selling front end merchandise Pharmacies and drug stores must be more focused on providing community health care services Drug stores and pharmacies need to focus on adding products and health care services that can be provided by qualified pharmacists and technicians in an easily accessible neighborhood location Drug stores and their pharmacy teams can provide this and will be part of the evolving health care ecosystem Walmart Internationals Varied Capabilities From page 32 home delivery That facility will complement the expanded grocery home delivery and pickup options at Walmarts Supercenters In 2019 the company extended its offerings beyond the 33000 grocery products available testing 12000 general merchandise items for same day delivery In China which Loafman describes as one of the worlds most evolved e commerce markets omnichannel is a vital means of accessing the huge population Walmart operates 435 stores in the country including 398 Supercenters 28 Sams Clubs and nine Neighborhood Markets Sams Club has proven to be enormously popular and generated about a quarter of Walmart Chinas 10 billion in sales We recognize there is a need for continuous innovation to accelerate accessibility McKenna told analysts Land is at a premium but we are finding asset light ways to supplement our bricksand mortar with new infrastructure that improves our ability to engage with members digitally The focus of Walmart Chinas omnichannel expansion has been mini fulfillment centers within Sams Clubs which the company refers to as cloud depots Think of these as low cost mini distribution nodes in high density urban areas which extend online access to our members for about 1000 of their most frequently purchased products McKenna explained They are set up with our crowd sourced delivery last mile partner JD Daojia and it allows customers and members to receive their orders in less than one hour To illustrate the extent of the opportunity in a recent pilot at the Sams Club cloud depot in Ningbo nearly 40000 orders for one hour delivery were received before the depot opened according to Loafman who added that Walmart China has now made one hour delivery available through JD Daojia for all of its 435 locations In Canada Walmart is investing 35 billion over the next five years to renovate 150 stores and build two new state of the art distribution centers as well as expand and enhance the omnichannel experience for customers For example store pickup service had been extended to about 270 of the 343 Supercenters in operation by the end of 2020 In addition the chain will pilot micro fulfillment centers in the back room of selected Supercenters to speed up fulfillment of both pickup and delivery orders Customers opting for store pickup will also benefit from the addition of advanced notification to the service This move is part of our longterm strategy to deepen investments in online shopping said Loafman Its been made doubly important by the heightened need for Walmarts flexibility during the COVID 19 pandemic Walmart has not limited its investment entirely to its major foreign markets In Chile for example it operates six microfulfillment centers that provide a curated assortment of basic necessities to customers within a 90 minute delivery window Walmart Chile has also recently Our customers are pivoting to the future announced a true hybrid supermarket and fulfillment center called Omnicentro that will allow customers to choose between shopping the brick andmortar store and making their purchases online Our business is changing along with the expectations of our customers everywhere McKenna concluded In every market our customers are pivoting to the future faster than ever before and we are well positioned to make the most of that shift 34 MMR January 11 2021