Check Out some weakness in book and drug stores sales.

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.

Meanwhile, same-store sales at drug stores were not what those retailers were hoping for. Walgreen, which saw sales at store open at least a year rise 4.9 percent in December, said shoppers focused on basic necessities, while staying away from seasonal items. Rite Aid’s same-store sales in the same period slipped 0.2 percent.

President-elect Barack Obama plans to propose up to $310 billion in tax cuts as part of his massive economic stimulus package in an effort to help the U.S. economy escape its recession.

Also in the basket:

LG, Netflix to launch TVs with instant movie viewing

China’s young generation gets thrifty in gloomy economy

China maker Waterford Wedgwood calls in receivers

Consumers to Pare High-Tech Purchases (Wall Street Journal)

The Coming Fallout: Who’s Vulnerable? (WWD)

(Photo/Reuters)

Check Out Walgreen Co slowing its store opening plan.

The drug store operator said on Monday it will open new stores at a rate of 4 percent to 4.5 percent in 2010 and between 2.5 percent and 3 percent in 2011. That’s down from an already reduced plan for 5 percent growth by 2011,  as Walgreen contends with a weak economy and restricted consumer spending.

It will open new stores in strategic markets, in the “best corners” and where there are the best return rates, Walgreen said.

The slower store growth will result in an additional $500 million cut in capital expenditures through 2011, Walgreen said, after it post a lower fiscal first-quarter profit.

Cutting store growth frees up capital that allows Walgreen to improve existing stores, such as by making their product assortments more efficient.

Also in the basket:

D&S stock jumps after Wal-Mart takeover offer

Fewer UK shoppers over weekend - survey

Sysco sees flat to lower Q2 sales

Retailers look to capture night owls - WSJ

India’s textile industry unravels - WSJ

(Photo/Reuters)

A small number of Americans have used in-store health clinics according to a study released on Monday by the Commonwealth Fund and conducted by the Center for Studying Health System Change.

Only 2.3 percent of American families, or nearly 3.4 million families, had used a retail clinic, according to the group’s 2007 Health Tracking Household Survey.

“While overall use of retail clinics remains modest, families with unmet medical needs tend to use the clinics more than the rest of the population,” said Ha T. Tu, M.P.A., an HSC senior researcher and coauthor of the study.

According to the report, there were more than 900 retail clinics in 30 states at the end of 2007, up from just about 60 in 18 states at the beginning of 2006.  The study does not include 2008 data.  Among a variety of retail clinic operators, Walgreen owns the Take Care brand of clinics and rival CVS runs MinuteClinic.

Also on Monday, Walgreen announced the opening of three more Take Care clinics, this time in the New Orleans area.  It now has 312 clinics in 18 U.S. states.

One-third of clinic users in the study said a major reason they chose to go to clinics was because they did not have a usual source of medical care. Not surprisingly, uninsured patients were more likely to visit the clinics.

(Photo from March 2007 Reuters/Take Care Health Systems/Handout)

Walgreen Co. said consumers’ bargain shopping hit profit in the latest quarter.  Still, Walgreen and other retailers might actually get a small benefit from the economic downturn and bank fallout. If banks ease up from opening ATMs on every corner, it could get easier for retailers to find attractive space for their stores.

The drugstore’s executives, in response to a question from UBS analyst Neil Currie during Monday’s conference call, said they’ve seen competition easing for good sites. They said banks started pulling back about six months ago and Walgreen now has more negotiating power when it’s looking for space. Still, it’s sticking with its plan to slow down its heavy dose of store openings. It added 561 stores to its lineup in fiscal 2008 and plans to add 495 new stores in fiscal 2009.

Walgreen also said it may add a loyalty card for its shoppers. So far, it has rounded up more than a million shoppers (the goal is several million) for the Walgreen Prescription Savings Club, which consumers pay a fee for in order to get cheaper drugs and a 10 percent reward on Walgreen-branded products.  President Greg Wasson said 25 to 30 percent of those using the card so far are new to its pharmacies.
 

Check Out Circuit City posting its fifth quarterly loss for the past six quarters and withdrawing its financial outlook, as declining store traffic put a damper on sales right before the key holiday season.
   

Circuit City, which competes with Best Buy, has been the subject of takeover speculation and other questions about its future as results weaken, hurt by  consumers dialing back on nonessential spending amid high food and gas prices and tight credit markets.  

Earlier in the year, Circuit City received a takeover offer from movie-rental company Blockbuster, but that was later withdrawn after the movie-rental company decided taking on the troubled retailer wasn’t in its best interests. No other company has since expressed interest.    

Last week, Chief Executive Philip Schoonover left, taking with him his full $900,000 base salary, another $900,000 target bonus for the current fiscal year, health care for two years and automatic vesting of his stock options. 

The company now says it is closely reviewing its business and will take steps to shore up its performance during the critical holiday shopping season.

 Also in the basket:

Walgreen posts higher quarterly profit (Reuters)

Pilgrim’s gets temporary waiver on convenant  (Reuters)

Wal-Mart Japan unit to close 20 stores, cut staff (Reuters)

(Photo/Reuters)

Check out Longs Drugs’ share price now that it’s got a new suitor.

Longs, the drug store chain with a heavy concentration of stores in California, got a surprise offer from Walgreen late on Friday that topped its previous buyout agreement with rival CVS Caremark.
    
Longs shares opened on Monday ahead more than 5 percent to $75.80, slightly above the Walgreen offer of $75 per share and proving that investors believe they can’t lose as the two biggest U.S. pharmacy operators battle over an acquisition.
    
At the very least, analysts say, CVS will have to sweeten its earlier $71.50 per share bid, despite its protestations to the contrary. And that doesn’t even take into account the possibility that Walgreen will become even more aggressive to keep Longs out of its rival’s hands.
    
The Walgreen offer is also lending a helping hand to Longs’ two biggest shareholders, who said on Friday they wouldn’t give up their shares to CVS because the offer price was too low.
    
What’s clear is that even as Wall Street reels from the downfall of Lehman Brothers and a surprise buyout of Merrill Lynch, a deal for purveyors of Tylenol and toothpaste can still capture some investors attention.

Footnote: Lehman has been advising CVS on the Longs deal, along with Deutsche Bank. Curious how quickly CVS can regroup to make a higher offer, if it should choose to do so?

Also in the basket:

Best Buy nabs Napster for $121 million (Reuters)

Target gets naming rights to Minnesota Twins stadium (Reuters)

Reddy Ice suspends dividend, sends sales exec on leave (Reuters)

(Photo: Reuters)

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 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 the Easter boost in drugstore land.
 
Drugstore chains have been hurt by the weak U.S. economy of late, especially in the nonprescription part of the store.
 
But Easter seems to have helped at least one of the largest drugstore chains: Walgreen’s.
 
Walgreen Co said strong sales of Easter merchandise helped it post better-than-expected general merchandise sales in March. And they aren’t just talking about the fact that Easter came early this year, moving up purchases that would normally have occurred in April.
 
“The company recorded strong Easter seasonal sales, and front-end sales exceeded expectations for the month despite the slowing economy,” it said in a news release.
 
Of course, those front-end sales were needed to offset tepid prescription drug sales. The switch of allergy medicine Zyrtec to over-the-counter status, and a slower flu season for prescriptions hurt sales in that area as did an influx of lower-priced generic drugs in the past 12-months.
 
Still, for at least a month, it was chocolate bunnies to the rescue.
 
Also in the basket:
 
Best Buy profit better than expected
 
Lululemon’s sales double, to close Japan stores
 
Knit prices soar up to 20 percent for fall (WWD, subscription required)

(Reuters photo)

Check out Walgreens’ push into health services

The drug store chain took a big step toward expanding beyond its retail business by announcing it planned to buy two health-care companies, publicly traded I-trax and privately held Whole Health Management.

The retailer has created a health and wellness division to manage health centers and pharmacies at worksites. Walgreen already operates consumer clinics in some of its stores, but now it sees a big opportunity to help companies lower their health costs.

“The story here is growth,” CEO Jeffrey Rein said.

Also in the basket:

Mattress maker Tempur-Pedic forecasts profit drop

Hard times for consumers threaten food companies

(Photo: Reuters)