Check out how generic drugs cut into June pharmacy sales at Rite Aid.

The No. 3 U.S. drugstore chain said its pharmacy same-store sales fell 0.5 percent, as generic drugs were introduced and allergy medicine Zyrtec was switched to over-the-counter status.

Generic drug rollouts hurt rival Walgreen as well. That company said a day earlier those drugs cut into its pharmacy same-store sales by 2.1 percentage points. 

Drugstores, in general, have been facing more competition from grocery stores and discounters like Wal-Mart, which have been offering discounts on a slew of prescription drugs.

Also in the basket:

Adidas eyes 6,300 stores in China by 2010

Blockbuster may do Circuit City deal later (New York Post)

Circuit City faces tough road but Chapter 11 not near

(Photo: Reuters)

Check Out the quarterly profit at Kroger Co.

The largest U.S. grocery chain posted a higher quarterly profit on Tuesday, thanks to its emphasis on lower prices and gasoline discounts – music to its shoppers’ ears and higher sales for itself.

“Kroger continues to help customers stretch their budgets in a number of ways, including lower prices and our expanded generic drug and gas discount programs,” chief executive David Dillon said in a statement.

The price cuts, he said, were helping Kroger’s customers save $1 billion annually, at a time when shoppers deem every last dollar precious, as they face skyrocketing prices for necessities such as gasoline.

Kroger also raised its outlook for the full year, based on the strength of the results from the reported quarter.

Also in the basket:

ConAgra sees higher than expected fourth quarter profit

Dollar Tree recalls 470,000 China-made glue guns

Williams-Sonoma is trimming its catalog mailings (WSJ - subscription needed)

 J.C. Penney Faults Fake Ad on YouTube (WSJ - subscription needed)

(Photo: Reuters)

Check out the quarterly results at Walgreen, one of the largest U.S. drugstore operators.

The company posted a 2 percent increase in quarterly profit, amid a weak U.S. economy and slowing growth in sales of prescription drugs —  in the reported quarter, Zyrtec was switched to over-the-counter status.

And a slower-than-usual flu season — (good for you and me) – wasn’t so good for Walgreen. The company also pointed to the milder flu period for a slowdown in prescription drug sales volume in the quarter.

The company said it is on track to beat its goal of opening 550 new drugstores this year — and perhaps even come to the rescue of cash-strapped shoppers in the process.

“We’re adding neighborhood locations for today’s customer who is searching for value and struggling with high gas prices,” President Greg Wasson said in a statement on Monday.

As of May 31, the company operated 6,727 store locations in 49 states, but will be in all 50 states when it opens its first Alaska stores in 2009.

Also in the basket:

Bunge to buy Corn Products for $4.4 billion

Costco plans Australia foray to challenge duopoly

Busch family member backs ’strong’ Anheuser Busch

Jones Apparel takes stake in Asian partner

(Photo: Reuters)

Check Out more news from the Anheuser-Busch front.

The company, which owns half of Mexico’s Groupo Modelo, said Modelo’s chief executive Carlos Fernandez resigned from Anheuser’s board, even as the American beer company tries to thwart an unsolicited takeover bid from Belgian-Brazilian brewer InBev NV.

Modelo is an important player here — it has been approached by Anheuser about a possible combination, according to the Wall Street Journal, while Reuters’ sources, who are familiar with the situation, have said that InBev also courted the Mexican company.

Separately, Anheuser also said that it will acquire the remaining 50 percent stake of the Crown Beers India Ltd joint venture from partner Crown International.

Crown International and Anheuser formed the Crown Beers India venture last year to distribute Budweiser and Armstrong, a beer developed specifically for India, throughout southern and western India.

Also in the basket:

InBev: US Anheuser breweries to stay after merger

EU raids detergent firms on suspicion of price fixing

Retail companies mull tactics ahead of holidays

Trying to hide price hikes with trends, fabrics

Clothing makers see fashion in color, detail

(Photo: Reuters)

Check out a flood of fresh trouble.
 
Consumers are already being clobbered by soaring food and fuel prices, and that has kept them from shopping for things like clothes.
 
But the floods in the Midwest over the past week are likely to make things even tougher on consumers. The floods have hit millions of acres of soybean and corn farms, removing more supply from an already tight market.
 
That is likely to add more to inflation, meaning less money in shoppers wallets, analysts said.
 
“CPI readings for the remainder of 2008 will be slightly higher than otherwise,” Citigroup economist Steven Wieting said in a  report. “This reduces real incomes and can also affect financial market expectations at the margin.”

The consumer price index, or CPI, measures the change in prices that consumers pay for goods and services.
 
So much for the rebate bump.
 
Also in the basket:
 
Staples win EU okay for Corp Express takeover
 
General Mills sees 2008 earnings above targets
 
Same-sex marriages boost California stores (WWD)

(Photo: Reuters)

Check out a bunch of retail executives talking about the state of the industry, economy and the outlook for holiday shopping.
 
It’s the Reuters Consumer and Retail Summit, being held this week in New York, featuring top executives from Borders, Best Buy, Toys “R” Us, Jones Apparel, Perry Ellis and others.
 
The executives meet with Reuters reporters as most retailers are struggling to attract consumers that have been clobbered by $4-a-gallon gasoline, falling home prices, a credit crunch and rising food costs.
 
Sales got a bit of a boost in May as consumers started to spend their tax rebates. But analysts say that bump could be fleeting, with consumers still under pressure after the rebates have been spent.
 
To find out what retailers think, check out the Retail Summit page all week.
 
Also in the basket:
 
InBev cautions Bid about striking Modelo deal
 
Trust chairman sees change, but no sale, at Hershey
 
CostPlus rejects Pier 1 acquisition offer
 
Starbucks says international growth to cushion U.S. weakness
(Photo: Reuters)

Check out inflation.
 
That $4-a-gallon gasoline really drives up consumer prices. The Consumer Price Index rose 0.6 percent in May, the largest increase since November. Year-over-year, consumer inflation was up 4.2 percent.
 
The so-called “core” index, which excludes food and energy, rose only 0.2 percent in May and 2.3 percent year-over-year.
 
But most consumers eat, drive and use heat or air conditioning. So soaring prices for energy and rising food prices — up 0.3 percent in May and 5.1 percent year-over-year — cut into what consumers can spend on clothes, home goods and other discretionary items. 
 
It also could mute the impact of the tax rebates consumers are receiving.
 
“Consumers are spending more to buy food and energy,” Lindsey Piegza, market analyst at FTN Financial, said. “The tax rebate is just offering them a cushion. They are not buying wide-screen televisions.”
 
Also in the basket:
 
Anheuser in talks with Grupo Modelo (WSJ, subscription required)
 
Battling a bumpy road” economic downturn (WWD)

Higher price for Anheuser not a sure thing

Budweiser could pay price for being “America’s Beer”

 (Photo: Reuters)

As consumer prices rise and the economy founders, Web surfers are scouring cyberspace for deals.

A new study released this week by market research firm Hitwise showed that online coupon clipping is on the rise.

Hitwise told Reuters that U.S. visits to certain custom coupon Web sites increased 66 percent from May 2007 to May of this year.

Heather Dougherty, research director at Hitwise, said shoppers are trying to cope with cost of living increases.

“While discretionary income is shrinking for some households, consumers are still shopping online, but making sure they find the best deals,” she said in a statement.

Coupons.com led the pack within the category, grabbing 29 percent of the market and chalking up a 190 percent increase since last year.  Coupon Mountain and Eversave rounded out the top three with 14 percent and 6 percent, respectively.

When Hitwise measured traffic from the week ending June 6, they found that search engines directed 20 percent of penny-pinching shoppers to coupon sites. Of the top search terms, 60 percent included a reference to a specific brand or branded product.

Monthly visits to comparison shopping Web sites also increased 60 percent from May 2007 to May of this year, Hitwise spokesman Matt Tatham said.

Looking for a bargain? Here are some other coupon sites:

• Coolsavings.com
• Couponsurfer.com
• Valpak.com
• grocerycouponguide.com

Check Out Pier 1’s sudden offer to buy Cost Plus for $88.4 million in stock, just as the home decor retailer is trying to cut its own losses from previous quarters by shutting stores, cutting jobs and  spending less on marketing.

Pier 1  said it would issue 0.6 shares of its common stock for each Cost Plus share outstanding. The Texas-based company believes it can seal a deal in the third quarter.

Pier 1’s chief executive officer Alex Smith thinks Cost Plus is an “excellent” fit and that a deal would improve Cost Plus’ s operating margin due to synergies with Pier 1 in areas like store operations and shared services.

From its end, Cost Plus, which sells home furnishings and gourmet food, said it would meet with its financial and legal advisors to review the proposal.

Also in the basket:

McDonald’s May same-store sales up 7.7 pct

Sotheby’s shares rise on revenue forecast

Goody’s files for Chapter 11 bankruptcy

Herbalife rebuts lead claims

U.S. gasoline rises above $4 a gallon for first time

From WAGs to watches: luxury’s soccer pitch

(Photo: Pier 1 Web site)

Upon entering Wal-Mart Stores annual shareholder meeting, an observer might be forgiven for thinking they had just walked into a lively, national political convention.

Patriotic red and blue buntings covered the 16,000-seat arena at the University of Arkansas, the music hardly stopped and the crowd was treated to a constrant stream of well-tuned public relations bullet points — in this case, sustainability, community relations and saving shoppers money.

Associates — the word the world’s largest retailer uses to describe its 2 million employees – whooped and hollered at every chance, especially whenever an executive uttered the word “proud.”

(An associate later told Reuters that staff had been told to react whenever they heard that word — even when it meant interrupting the speaker, presumably.)

“We’re just having fun!” said Mike Miller of Scott Depot, West Virginia, whose group of fellow Sam’s Club associates donned funny hats with stars and stripes, reminiscent of a patriotic Dr. Seuss character.

Large balloons emblazoned with the company slogan “Save People Money So They Can Live Better” bounced back and forth between the bleachers, and enthusiastic associates waved flags.

Even Master of Ceremonies Queen Latifah seemed moved by the euphoria. After a number in which singers sang “One World” as representatives from different countries took to the stage in a mini-U.N, the performer beamed and sighed: “One world — a Wal-Mart world.”

The associates’ enthusiasm waned somewhat during presentations by the companies’ financial mucky-mucks — shares up 26 percent since January, ho hum, etc — but revived somewhat with a performance by Dreamgirls’ Jennifer Hudson (picture at right).

She sang, fittingly, “And I Am Telling You I Am Not Going.”

Just like Wal-Mart. – Reporting by Alexandria Sage

(Reuters photos)