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Costco is in good hands with Jelinek at helm

BY Alaric DeArment

WHAT IT MEANS AND WHY IT’S IMPORTANT — While news media fret over what effect Steve Jobs’ departure from Apple will have on that company, it’s clear that Jim Sinegal is leaving Costco Wholesale in capable hands as he prepares to step down as CEO and hand leadership over to president and COO Craig Jelinek.

(THE NEWS: New leadership era begins at Costco. For the full story, click here)

It’s no surprise that when Sinegal, who cofounded Costco with chairman Jeffrey Brotman in 1983, announced his plans to retire, the company posted strong fiscal-year and monthly sales results on Aug. 28. The mass-merchandise club retailer has managed to deftly pull itself through the economic crisis and subsequent weak economy over the past three years. To say that Sinegal gave the company his best effort would be an understatement: As Barron’s magazine reported in March when it named him one of the 30 best CEOs, after a trip to Asia to look for places to open new stores, he landed near Costco’s Issaquah, Wash., headquarters, took a quick shower and was in the office by 9 a.m.

Over the last 28 years, the company has distinguished itself with a corporate culture that has set it apart from most mass merchandisers, but also made it a pioneer. Instead of category management, the chain focuses on "item management" that allows it to turn any SKU into an overnight sensation. The company also has distinguished itself as an employer, offering generous benefits packages to employees ranging from salaried executives to part-time workers in the stores.

Jelinek, who has worked for the company since a year after its founding, plans to keep that culture intact, meaning that while Sinegal’s planned Jan. 1 departure may mark the end of an era, the next era won’t differ too much from the last one, and that’s probably a good thing.

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Putting wellness into hands of customers

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT — An ounce of prevention is worth a pound of cure. At least that’s what retailer Whole Foods is banking on with its test run of "Wellness Clubs."

(THE NEWS: Whole Foods commences test run of Wellness Clubs. For the full story, click here)

And if the Whole Foods initiative proves successful, you can expect to see more of these consumer-directed health models to develop. The Whole Foods Market Wellness Club concept, which is being tested in five locations, is designed to help customers take their well-being to the next level through education, cooking, coaching and a support structure aimed at ensuring long-term success. Plus, members receive a 10% discount on a wide variety of healthy foods.

If the Whole Foods pilot works, it could suggest that Americans — at least wealthier shoppers who can afford to shop at Whole Foods — are willing to spend from their own pocket to stay healthy. The initiation and monthly fees will vary by location. The first Wellness Club opened Aug. 15 at the Dedham, Mass. Whole Foods and customers can buy into that club for a $199 one-time fee and a $45 per-month membership fee. In September, Whole Foods is planning to open Wellness Clubs in stores in Chicago and Oakland, Calif. In October, one is slated to open in New York and Princeton, N.J., in November.

As mentioned earlier, if the test concept is successful the industry can expect to see more consumer-directed health models develop.

Obviously, there are some models already in play (i.e., Hannaford’s free dietitian-led nutrition classes across New England, ShopRite’s onsite registered dietitians within select stores and RediClinic’s new Weigh Forward medically-supervised weight-loss program) but there undoubtedly are additional opportunities on the horizon for more bundled, consumer-directed concepts.

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Walgreens’ comps garner positive numbers in August

BY Allison Cerra

DEERFIELD, Ill. — Walgreens saw a 7.8% sales gain during August, the retailer reported Tuesday.

Total front-end sales increased 6.8% in August and basket size increased 2.3%, Walgreens said.

Comparable-store sales rose across the board — thanks to positive calendar day shifts — including a 2.5% increase in customer traffic at comparable stores, a 4.8% increase in comparable total front-end sales, a 6.1% rise in comparable pharmacy sales and a 5.2% increase in prescriptions filled at comparable stores. Overall, sales in comparable stores (those open at least a year) increased 5.6%.

The retailer reported that flu shots administered season-to-date at pharmacies and clinics totaled more than 300,000.

Walgreens noted that Hurricane Irene had no significant net effect on total sales.

For the month, Walgreens opened 21 stores, including three relocations, acquired three stores and closed three, for a net increase of 18 in the month.

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