Retailers, consumers and prices
Check out the sluggish sales at Walgreen.
People filled more prescriptions at the drugstore chain, but didn’t buy much else. August same-store sales rose only 1.9 percent, less than analysts had anticipated.
While many retailers have been experiencing sales declines, drugstores have generally done much better because an aging population has been buying more prescriptions drugs.
But Walgreen’s sales of general merchandise fell 1.3 percent.
That could be a bad sign for other retailers that report sales this week. Walgreen is the third-largest retailer that reports monthly sales, behind only Costco and Target.
Overall, analysts are expecting a 3.8 percent drop in same-store sales when retailers report this week.
Also in the basket:
Zale identifies prior adjustments, delays results
Jos A Bank Q2 results top Street
Brown-Forman profit tops view
Tesco uses weather to predict sales (N.Y. Times)
Retail theft soars in economic downturn (WWD, subscription required)
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.
Pharmacy chain Walgreen Co and Delaware are playing hardball in a battle over cuts in prescription drug reimbursements — a model other cash-strapped states could follow as they try to compensate for budget shortfalls.
Delaware plans to reduce the amount it reimburses pharmacies for filling Medicaid prescriptions though by half as much as it previously intended.
Check out the expected weak May sales in the U.S. retail landscape.
Despite Memorial Day sales, warmer weather and deals such as $1 flip-flops, most U.S. retailers are expected to report declines in same-store sales in May as shoppers kept hunting for bargains in the recession.
Only eight of 30 retailers are expected to post growth in May sales at stores open at least a year when companies report results this week. Walgreen kicked things off with a 1 percent increase, but that was below what analysts had expected due to weaker-than-expected sales at its pharmacy counters.
Tiffany & Co’s fourth-quarter profit handily topped analysts’ estimates, after the luxury jeweler took aggressive steps to tighten its cost structure as even wealthy consumers pare back spending in the recession.
The drugstore chain confounded some investor expectations by staying in house and naming President Greg Wasson as its next CEO.
After looking for months at external candidates, it said Wasson will take over Feb. 1. The news was somewhat unexpected as Walgreen had hired a search firm and looked at several outside candidates. Some analysts had suggested Walgreen needed to bring in an outsider to shake things up.
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.
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.
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.