Joe Taschler

Milwaukee Journal Sentinel

Kroger Co., the parent company of the Pick 'n Save, Metro Market and Copps stores in Wisconsin, said Tuesday it is buying a portion of the pharmacy business of Green Bay-based Shopko Inc.

The agreement calls for Kroger to take over the pharmacy files of 42 Shopko locations, including 25 stores in Wisconsin.

The move means that Shopko pharmacy customers in Wisconsin will have their prescriptions transferred to their local Kroger-owned grocery store.

The Pick 'n Save, Metro Market and Copps stores are part of Milwaukee-based Roundy’s Supermarkets, Inc., a wholly owned subsidiary of Cincinnati-based Kroger.

Financial terms of the agreement were not disclosed. A Kroger spokesman said the purchase adds a "significant" number of potential new pharmacy customers to Kroger's stores.

The Wisconsin stores are in Appleton, Fond du Lac, Grafton, Green Bay, Kenosha, Kimberly, Manitowoc, Marshfield, Menasha, Neenah, Oshkosh, Plover, Racine, Rothschild, Sheboygan, Stevens Point, Sussex, Watertown, Wausau, West Bend and Wisconsin Rapids.

Kroger also said it is adding pharmacies in early January at the Pick ‘n Save at 205 Central Bridge St., in Wausau, and the Pick ‘n Save at 641 Central Ave. in Marshfield.

That nearly two-thirds of the Shopko pharmacies involved in the purchase are in Wisconsin reflects Kroger's ongoing investment in the state, said Kroger CEO Rodney McMullen.

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Since buying Roundy's in 2015, Kroger has invested $300 million in its stores in Wisconsin. The company operates 106 stores and employs about 13,000 people in the state.

"It really is part of our commitment to Wisconsin and growing in Wisconsin," McMullen said of the Shopko pharmacy business purchase.

Kroger is hoping the convenience of being able to pick up pharmacy items as well as groceries all in one trip will appeal to customers.

Growing its pharmacy business is part of the company's plan to continue building its presence in Wisconsin.

"For us, it's an absolutely important and critical part of our growth," McMullen said. "It's that overall relationship with the customer. What we are trying to do is make your life easier.

"We're just trying to make it incredibly easy for you and to do it with great service and incredible, fair pricing," he added. "We have an unrelenting focus on serving our customers."

Kroger will seek to add as many Shopko pharmacy employees as possible.

"The Shopko associates that are part of the pharmacy business, we'll interview them and hopefully we'll find matches that work for them and they can continue their careers with us," McMullen said.

In addition, Kroger will service Shopko pharmacy customers in Utah, Nebraska, Idaho, Washington and Montana.

Kroger, the nation's second-largest retailer, operates nearly 2,200 retail pharmacies in 37 states. Overall, Kroger operates more than 2,700 stores and generated $123 billion in sales in 2017. Kroger serves 9 million customers a day.

Founded in 1962 and headquartered in Green Bay, Shopko Stores Operating Co. LLC operates 363 stores in 24 states throughout the Central, Western and Pacific Northwest regions.

The sale of the pharmacy business comes a few days after Shopko said it is closing 39 stores, mostly in small towns, in 14 states. The only Wisconsin store closing is in Mauston.

A changing industry

The sale of Shopko's pharmacy business to Kroger comes amid ongoing consolidation in the retail pharmacy segment.

Drugstores have shifted product lineups in recent years, adding food and wellness items, seeking to bring in more shoppers who want to cut down on trips to multiple stores.

Meanwhile, Kroger said in October that it will begin selling some of its products in 13 Walgreens stores near Cincinnati. It will also allow customers to use those Walgreens locations to pick up Kroger groceries ordered online.

CVS Health Corp. is already running pharmacies and clinics inside Target stores.

And, Amazon in late June said it is jumping into the online pharmacy business by acquiring Boston-based online pharmacy startup PillPack.

USA TODAY and the Associated Press contributed to this report.