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Ahold USA appoints new EVP marketing

BY Alaric DeArment

CARLISLE, Pa. — Royal Ahold’s American division has split its EVP marketing and merchandising position in two, the company said.

Ahold USA announced the appointment of Erik Keptner to the newly created position of EVP marketing. The search for an EVP merchandising is ongoing, the company said. Ahold USA operates the Giant-Carlisle, Giant-Landover and Stop & Shop chains and the online grocery service Peapod.

Keptner will report to COO Carl Schlicker and will be responsible for long-term marketing strategies. He started working for Ahold USA in 1998 as a consumer research analyst at Giant-Carlisle and has served as SVP marketing and consumer insights since 2010.

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Shoppers Drug Mart sees growth in Q2 sales, net earnings per share

BY Antoinette Alexander

TORONTO — Canadian pharmacy chain Shoppers Drug Mart posted a rise in second-quarter sales, thanks to modest sales growth in pharmacy and strong results at the front end, where the company experienced sales gains in all regions of the country.

"We are pleased with our second-quarter operating and financial results. This performance speaks to the strength of our value proposition in what remains a challenging economic environment. It is also a testament to the quality of our people, including our associate-owners and their teams at store level, as they continue to execute on our strategic priorities and initiatives in order to mitigate the impact of regulatory reforms on our business,” Shoppers Drug Mart president and CEO Domenic Pilla said.

Second-quarter sales were $2.46 billion Canadian dollars, an increase of 2.6%, compared with the year-ago period. On a same-store basis, sales increased 2.2% during the quarter.

Pharmacy sales were C$1.17 billion in the quarter, an increase of 1.5%, compared with the same period last year, as solid growth in the number of prescriptions filled at retail, combined with strong sales growth in the company’s MediSystem Technologies and Specialty Health Network businesses, continued to be partially offset by a reduction in average prescription value. On a same-store basis, pharmacy sales increased 0.8% during the quarter.

During second quarter 2012, the number of prescriptions dispensed at retail increased 4.2%, compared with the same period last year and also rose 3.8% on a same-store basis. The decrease in average prescription value largely can be attributed to further reductions in generic prescription reimbursement rates, the result of recently implemented and ongoing drug system reform initiatives in certain jurisdictions of Canada, along with increasing generic prescription utilization rates. Generic molecules represented 58.6% of prescriptions dispensed in the second quarter 2012, compared with 56.9% in the same period last year. In second quarter 2012, prescription sales accounted for 47.7% of the company’s sales mix, compared with 48.2% in the same quarter of last year.

Front-store sales were C$1.29 billion in the second quarter, an increase of 3.6%, compared with the same period last year, led by strong growth in cosmetics and in food and confection. The company’s store network development program, which resulted in a 4.2% increase in drug store selling space, compared with a year ago, continued to have a positive effect on sales growth, particularly in the front of the store. Front-store sales growth also was driven by marketing campaigns and promotions, along with program execution at store level. On a same-store basis, front-store sales increased 3.4% during the quarter.

Second-quarter net earnings, inclusive of a charge of C$5 million (pre-tax) from the closure of two Murale stores were C$146 million, compared with C$148 million in the same period last year. On a fully diluted basis, net earnings per share were 70 Canadian cents versus 68 Canadian cents in the year-ago period, an increase of 2.9%. Excluding the impact of this charge, adjusted net earnings for second quarter 2012 were C$149 million, or 71 Canadian cents per fully diluted share, an increase of 4.4%.

At the quarter’s end, the company operated 1,340 stores in the system, which included 1,271 drug stores (1,215 Shoppers Drug Mart/Pharmaprix stores and 56 Shoppers Simply Pharmacy/Pharmaprix Simplement Santé stores), 63 Shoppers Home Health Care stores and six Murale stores.

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Packaged Facts: Prepared, ready-to-eat foods market expected to rise 7.5%

BY Allison Cerra

ROCKVILLE, MD. — Prepared foods and ready-to-eat foods are seeing major gains at retail, especially at supermarkets, according to a new Packaged Facts report.

According to "Prepared Foods and Ready-to-Eat Foods at Retail," sales of such items will reach nearly $32.5 billion this year, up 7.5% from 2011. While sales continue to rise, supermarkets garner the majority of prepared foods purchase visits at 60%, followed by Walmart and convenience stores (15% and 12%, respectively). Packaged Facts noted that the rise of these sales are due to the accessibility to a wide range of household incomes.

The report also cited that "strong, high-quality store-brand portfolios are a significant advantage for prepared foods retailers in keeping the price points of prepared foods down, and part of the winning formula." Packaged Facts called out such retailers as Costco, Kroger, Safeway and Supervalu, all of which continue to grow and leverage their private-label products in conjunction with developing their food service programs.

Click here to access the full report.

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