Retailers, consumers and prices
Check out the impact of signs the U.S. flu season may be weaker this year.
Drug stores such as Walgreen, CVS and Rite Aid are offering flu shots earlier and more conveniently to keep sales from slumping with no expected H1N1 outbreak this year along the lines of last year.
Last year, consumers came for flu shots and bought other items as well, but those related sales could suffer this year. Walgreen, for example, said lower demand for flu-related prescriptions cut 0.3 percentage point from its same-store sales growth in August.
This year, drug stores began promoting flu shots in late August, a week earlier than last year.
Making it tougher for drug stores are rivals like grocery stores (Supervalu and Kroger), and big-box retailers (Target) have been offering flu shots as well.
Check out the latest news on U.S. retail sales.
The trend was pretty much the same as it has been lately — most chains posted declines in August sales at stores open at least a year, or same-store sales.
However, many declines were not all that bad and there were a handful of increases, which could be a sign that consumers are really back to shopping.
People have been worried about the H1N1 flu, aka swine flu, for months but the vaccine for that flu is not expected until at least mid-October.
So, for the time being, we’re taking a look at how the three major U.S. drugstore chains are preparing for the seasonal flu, which is responsible for about 36,000 deaths in the United States each year.
Check out June same-store sales at drugstore chains.
Walgreen Co and Rite Aid both reported sales at stores open at least a year, pointing to shoppers filling more prescriptions but buying less discretionary summer merchandise. Walgreen said same-store sales in June rose 3.4 percent, while smaller rival Rite Aid saw sales slip 0.6 percent.
Economists and analysts had previously pointed to signs the recession may be nearing an end, but the news is still mixed as the number of jobs cut in June was higher than expected and the unemployment rate rose to 9.5 percent.
Borders dumped Chief Executive George Jones less than three years after he joined the No. 2 U.S. specialty bookseller, replacing him with a private equity executive with experience turning around ailing companies. The company, which reported a sales decline of almost 12 percent during the holiday shopping season, also named a new chief financial officer as well as replacing its executive vice president for merchandising and marketing.
In November, Borders said it was no longer pursuing a possible sale of the company even as it posted a larger-than-expected operating loss.
(Due to a tabulation error in the research, STORES Magazine has issued a corrected list. This is being corrected to remove Coldwater Creek from the Top 10 list and replace it with Citi Trends at No. 10)
Though the retail industry cooled last year to its slowest growth since 2002, a number of retail companies experienced fiery growth, according to the National Retail Federation. The hottest retailers, in general, grew through acquisitions, according to the trade group’s STORES Magazine.
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.
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.
Check out the latest thing at the local drug store: at-home paternity tests.
Drug stores have long sold condoms and pregnancy tests. The next natural step may well be the Identigene DNA Paternity Test Collection Kit, which is now being sold in Rite Aid’s 4,363 drug stores in 30 states and the District of Columbia. (The kits are not available in New York because New York State requires a court order for paternity test, a Rite Aid spokeswoman said.)
“Over-the-counter sales offer a completely new marketing channel for DNA testing,” Identigene Chief Operating Officer Doug Fogg said in a press release. “It makes the process more convenient and affordable while ensuring reliability and confidentiality.”
The press release also offered this account from an actual user:
“Because of my personal circumstances, the day I left the hospital after my son was born I turned in case papers for a paternity test,” said Natalie Maynes of Vancouver, Wash. “Two months went by with no word, so I called. They told me with their waiting list, test results could be up to six months away. That night on the news, I learned I could buy an Identigene DNA Paternity Test Collection Kit at Rite Aid. Taking samples was easy, and it was nice to be able to do it ourselves. Five days later, we had our results.”
The suggested price for the test kit is $29.99 and the laboratory processing fee is $119. Test subjects collect a DNA sample by rubbing a swab inside their mouths. The samples are then sent to Identigene for processing.
Paternity tests may seem more the province of tabloid television staples like “The Maury Show” but for Rite Aid, offering the tests is a way to be competitive in the drug store business.
“Our goal is to be first to market with innovative health care products,” Rite Aid spokeswoman Cheryl Slavinsky said.
For Identigene, it’s about meeting a need, as found when the company test-marketed the kits in three states beginning in November.
“We learned that people are extremely receptive to the idea of purchasing a DNA paternity test kit while shopping at one of the nation’s leading drug store chains,” Fogg said.
Also in the basket:
Walgreens rolls out casual gear (WWD, subscription required)
Charlotte Russe sees Q3 profit below Street estimates