April sales up 3.8% across Walgreens
DEERFIELD, Ill. — Walgreens on Friday posted April sales of $6 billion, an increase of 3.8% as compared to the same month in fiscal 2012.
Total front-end sales decreased 2.9%, while comparable store front-end sales decreased 4.3%. Customer traffic in comparable stores decreased 5.9% while basket size increased 1.6%.
"The shift in Easter should have a material negative impact on the front-end sales of the drug stores in April, but we believe the difficult underlying trends that have settled in for some time now likely continued," suggested Ed Kelly, Credit Suisse research analyst, in a note published Wednesday. "Our monthly Nielsen trend-tracker indicated that sales were flat in the drug store channel for the four-week period ending April 13, with volumes down roughly 3%. In our view, drug stores are losing share to lower priced competitors (e.g. mass, dollar stores priced around 25% to 30% below drug stores), particularly as weakened consumers focus on value," Kelly wrote. "[And] changes in Walgreens’ promotional program when it launched a loyalty card have also caused issues at this company."
For the combined March/April period that includes the Easter holiday season, comparable store front-end sales decreased by 0.2%, while customer traffic in comparable stores decreased 4% and basket size increased 3.8%.
Prescriptions filled at comparable stores increased by 9.7% in April and increased 6.3% on a calendar day-shift adjusted basis. This year’s April had one additional Tuesday and one fewer Sunday compared with April 2012.
These calendar shifts positively impacted both comparable pharmacy sales and prescriptions filled at comparable stores by 3.4 percentage points.
April pharmacy sales increased by 7.3%, while comparable store pharmacy sales increased 4.7% and increased by a calendar day-shift adjusted 1.3%.
Pharmacy sales accounted for 64.5% of Walgreens’ total sales for the month.
Sales in comparable stores increased by 1.2% in April. Calendar day shifts positively impacted total comparable sales by 2.2 percentage points, while generic drug introductions in the last 12 months negatively impacted total comparable sales by 2.6 percentage points.
Sales for the combined months of March and April 2013 increased 3% from the same two months in 2012. Comparable store sales for the March/April period increased 0.8%.
Registrations for Walgreens Balance Rewards loyalty program, which launched in September, totaled more than 68 million through April.
DSN tours Walgreen’s new Boston flagship store with Bryan Pugh
BOSTON — Walgreens VP merchandising, store design and well experience Bryan Pugh walked DSN through the company’s newest flagship store, here, in downtown Boston, Tuesday, a day before the official ribbon cutting of the store.
For photos of the pharmacy and OTC section (Part 1), click here.
For photos of the beauty section (Part 2), click here.
For photos of the consumables and general merchandise sections (Part 3), click here.
For photos of the ribbon-cutting, store exterior and design (Part 4, click here).
The expansive, 25,000+-sq.-ft. store, including more than 17,000 sq. ft. of selling space and more than 20,000 SKUs, Pugh explained, includes at least one entirely new feature — an interactive kiosk that allows customers to sample a selection of beauty products for $1. Developed by Coinstar, the kiosk, which accepts both cash and credit cards, included offers from about two dozen different vendors, including fragrance maker Coty and others. Samples are packaged in elegant, faux-alligator black gift bags and envelopes and delivered robotically through a sliding hatch.
Also unique to the new Boston store is a special tie-in between the city of Boston’s Boston Moves initiative — which aims to get Boston residents to lose 1 million pounds and move 10 million miles — and Walgreen’s Steps with Balance Rewards program, designed to reward Balance Rewards card members for engaging in healthy behaviors and wellness-related activities. A Boston Moves kiosk is located just outside of the pharmacy area and links directly to the city’s Boston Moves portal.
The store also is home to the company’s 45th Look Boutique — with 29 currently in Duane Reade stores and 16 in Walgreens stores — with a total of 55 stores planned by the end of the year, Pugh told DSN. The Boston store also hosts the company’s third installation of the Boots No 7 boutique. The plan is to add the No 7 boutique to many of its existing flagship stores as well as many of the new flagship stores Walgreens plans to open in the coming weeks and months, including Powell St., in San Francisco, scheduled to open next week, and a massive overhaul of its Las Vegas Strip store located in the Venetian casino resort, slotted for late May. Other flagship stores are planned this year for South Beach in Miami, Philadelphia and another Chicago location at Clarke and Broadway.
The Boston store, which also features an Essie/OPI nail bar and a Ramy Eyebrow Bar, places a heightened focus on service, particularly in beauty, and a large number of beauty advisors were on hand for the pre-opening events, practicing application techniques and participating in hands-on training.
The focus on service also continues in pharmacy, where Walgreens’ “bridge” pharmacy design puts its pharmacists in front of the patient. The new state of the art pharmacy format essentially creates two pharmacy teams in the store — the patient care team that the customer sees, and the tech-driven production team that exists behind the scenes, where the heavylifting of filling scripts occurs (i.e., counting, filling, etc.). The workflow enables the pharmacist to approve fills via hi-definition images transmitted from the backbench to the pharmacist’s ipad or desktop in front of the counter.
According to Nimesh Jhaveri, executive director of pharmacy services for Walgreens, the new format is now enabling its pharmacists to engage in consultations with about half of its patients, he explained. How does that compare to a few years ago, prior to the rollout of the new pharmacy design? “It was in the low single-digits,” Jhaveri explained. “In the past, it was more of a forced consultation based on something we needed to do.” That engagement is picking up on the patient side, too, Jhaveri added, with about 11% to 15% of patients requesting more in-depth counseling in a private area.
Like all of its flagship stores, the Boston store puts a major focus on consumables and fresh food offerings. In fact, about 47% of the merchandising is dedicated to consumables, Walgreens executives explained. The typical Walgreens store product mix is about 25% to 35% consumables. The Boston store features a fresh sushi bar, smoothies and fresh-squeezed juices and a baked goods partnership with two high-end Boston sweetshops.
Pugh explained that normally a store of this size in a downtown neighborhood would typically occupy multiple floors, but the new store brings together two pretty high-profile addresses, the former Borders store facing the busy Washington St. thoroughfare and the historic Five Cents Savings Bank building on School St., enabling Walgreens to create more or less, one big contiguous space, with the consumables and health/beauty sides of the store separated by just a few stairs versus an escalator.
Preserving the history of the space, Walgreens restored the bank’s original revolving doors, which had been sealed for more than 20 years. It also created a museum showpiece, combining the original David Morgan office with the bank’s vault to help tell the story of Walgreens to Boston customers. “We’re not from this part of the country, so we thought it was important to utilize the space to show the heritage and history of Walgreens and tell the history of the company,” Pugh told DSN.
Eli Lilly, Boehringer Ingelheim launch educational program for healthcare professionals
INDIANAPOLIS — Drug makers Boehringer Ingelheim and Eli Lilly have started a campaign designed to educate healthcare professionals about the role a type of protein plays in maintaining blood-sugar balance.
BI and Lilly created the website sglt.com to inform users about the role of sodium glucose co-transporters. The program also includes a video, Glucose Perspectives, in the form of a sketch animation by the United Kingdom’s Royal Society for the Encouragement of Arts, Manufactures and Commerce.
SGLTs work by ensuring that glucose entering the kidneys finds its way back into the bloodstream instead of being passed in urine. SGLT1 and SGLT2 reabsorb nearly all the filtered glucose in the kidneys, with SGLT2 accounting for 90% of reabsorption, according to a 2008 study.
In March, the drug makers applied with the Food and Drug Administration for approval of empagliflozin, a drug that belongs to a new class called SGLT2 inhibitors. The partnership between the two companies was announced in January 2011.
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