Coming off strong Q1, Walgreens’ Dec. sales grow
DEERFIELD, Ill. — Shortly after announcing a record-setting first quarter last month, Walgreens reported on Wednesday that its December sales rose 7.5% to $6.8 billion.
The chain said that Duane Reade stores, which Walgreens acquired in April 2010, contributed 2.5 percentage points.
Meanwhile, Walgreens also raked in a 9.5% increase for its total front-end sales, thanks to a spike in customer traffic and basket size. Pharmacy sales for the chain, which accounted for 58.6% of total sales for the month, saw a 6% boost.
Same-store sales for the drug store chain rose 2.8%, including a 3.6% rise in comparable front-end sales — the highest increase the chain realized in 14 months — and a 2.2% rise in comparable pharmacy sales.
During the month of December, Walgreens opened three stores, including one relocation, and acquired three stores.
Supplier survey: Working with Walmart
ROGERS, Ark. — If the eyes are the window to the soul, then Walmart’s suppliers are the window to its future, thanks to the truly unique relationship the retailer enjoys with its trading partners. Walmart brought new meaning to the concept of collaboration when it pursued a strategy of data transparency decades ago that enabled fact-based decision-making. Suppliers embraced what, at the time, was a novel approach in the retail industry, and their support over the years facilitated Walmart’s expansion, sales growth for all concerned and low prices for consumers.
The happy marriage hit an inevitable rocky patch in recent years. A transformed senior leadership team at Walmart pursued strategies beyond the scope of the company’s traditional skill set, and it became less receptive to the views of its trading partners, even as the new strategies proved highly disruptive.
You might say Walmart got counseling during the past six months and rededicated itself to making the relationship work again. Through the words of senior executives and the deeds of merchants whose collaborative efforts with suppliers have become increasingly evident in stores, Walmart is a company that appears intent on recharging the tradition of partnership and collaboration, while simultaneously moving forward to pursue new opportunities.
Given this climate, DSN’s sister publication, Connecting Northwest Arkansas, thought it was an ideal time to take the pulse of the Walmart supplier community in Northwest Arkansas. Half of those who participated have worked with Walmart for 12 years or more, so results were influenced heavily by the views of those with a historical perspective of the business relationship. Regardless of the suppliers’ track records with Walmart or past strains on the relationship, they have been largely unwavering in their commitment of resources. Forty-nine percent of suppliers said the size of their team and resources allocated to Walmart stayed about the same during the past year, and another 40% said it increased slightly or significantly, a rather noteworthy finding given the expense pressures all companies faced throughout 2010. Look for more of the same in the coming year; 61% of suppliers indicated the size of their team and resources allocated to Walmart will stay about the same, with another 35% anticipating a slight or significant increase.
The commitment to Walmart comes as suppliers view an interesting mix of threats on the competitive front. For example, the 20,000-unit strong and growing dollar store channel, with its emphasis on value, was suppliers’ top concern, followed closely by Target, which has sharpened its pricing and elevated its food and consumables offering. That Kroger is viewed as a top competitive threat is understandable, given the company’s status as the nation’s second-largest food retailer, but Amazon.com’s ranking ahead of the drug channel, Costco and the value-oriented food channel is something of a surprise.
It should come as no surprise that driving profitable sales growth is the overwhelming top concern of suppliers as they look to manage their business with Walmart over the course of the next five years. Nearly 70% of those surveyed indicated sales were among their greatest concerns, which begs the question of why it wasn’t mentioned by 100% of those surveyed.
Of course, suppliers have many other things to be concerned with at Walmart, including shifting personnel and priorities mentioned by 57% of those surveyed. The issue largely is self-inflicted on Walmart’s part, and reveals the potential waiting to be unlocked if suppliers were able to focus greater energy on sales and other top concerns, as opposed to staying abreast of management and strategic changes that have been pronounced in recent years.
Given those concerns, it stands to reason that joint business planning and collaboration ranked as a top concern, as did the perennial retail challenge of store-level execution. Beyond these areas, supplier concerns diminished fairly quickly, with a reduced percentage of respondents indicating such things as private-brand competition, Walmart International and Walmart.com. The size and complexity of Walmart and the recruitment of management talent also were low on the list of suppliers’ greatest concerns. In addition, very few suppliers mentioned sustainability compliance or diversity objectives as top concerns, despite Walmart’s emphasis on these areas in recent years.
Suppliers’ concerns about sales and execution make it logical that some of the greatest anticipated needs for 2011 touched on these areas — shopper insights was the top-ranked need area for the year. Meanwhile, such execution-oriented areas as supply chain, replenishment, data analysis and out-of-stock minimization drew large numbers of responses. In contrast, the much-hyped area of multichannel and mobile integration drew very few responses.
Macy’s grabs shoppers with ‘Gift Shops’
NEW YORK — Macy’s stepped up its approach to holiday shopping this season with its first-ever grab-and-go “Gift Shops.” In 400 Macy’s stores nationwide, new main floor Gift Shops offered a one-stop gifting destination featuring limited-edition gifts exclusive to Macy’s, including ready-to-gift techie gadgets, apparel, accessories, beauty finds and chic home goods.
The festive branded spaces incorporated distinctive gifts ranging from classic games by Ridley’s and dessert plates to metallic candles and chic cell phone covers in ready-to-go packaging to make holiday shopping simple. Centrally located in high traffic, main floor destinations, the Gift Shop ultimately was aimed at making shopping fun and easy for customers who have limited time and limited budgets. All of the items were ready to gift with easily removable price tags.