Longs Drug Stores Corp. plans to build a giant new distribution facility in Patterson.
The 800,000-square-foot facility, which will cost between $50 million and $55 million, will allow the Walnut Creek-based drug store chain to expand self-distribution of its general, or "front end," merchandise. That means Longs can deal directly with more manufacturers and forgo middleman distributors.
"Strengthening our direct links with consumer product manufacturers and distributors should contribute to the continued progress we plan to make on improving our profitability long term," Warren Bryant, chairman, president and CEO, said in a prepared statement.
The new building should be operational by fall 2006, at which point the company will shift operations from a 427,000-square-foot distribution facility in Lathrop. It has not determined what it will do with the Lathrop building at that time.
The company expects to self-distribute about 80 percent of its front-end goods by 2007, up from 40 percent now.
Longs, which has been centralizing much of its operations during the past few years, will continue to distribute front-end merchandise through facilities in Southern California and Hawaii. Pharmacy items will not be affected by this change.