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Costco’s same-store sales rise in June

BY Marianne Wilson
ISSAQUAH, Wash. — The nation's largest wholesale club operator reported strong sales for the month of June, both domestically and globally.
 
Costco posted net sales of $12.17 billion for the five weeks ended July 2, 2017, up 5% from $11.33 billion during the year-ago period. Total same-store sales were up 6%.
 
In the U.S., same-store sales rose 6.5% in June. International same-store sales increased 6.2%. Canadian same-store sales rose 3.2%. 
 
In a note, Gordon Haskett analyst Chuck Grom commented that Costco's traffic trends were very healthy during June, up 4.5% in the United States. Domestically, the chain's top performing regions were the Midwest, the Bay Area, Texas, and San Diego, the analyst said.  
 
For the 44 weeks ended July 2, 2017, Costco reported net sales of $104.28 billion, an increase of 6% from $98.51 billion during the similar period last year. U.S. same-store sales increased 3.9%.
 
Costco currently operates 734 warehouses, including 511 in the United States and Puerto Rico, 95 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain, one in Iceland and one in France.
 

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Meijer expands store-to-door delivery to 2.5 million Chicagoland shoppers

BY Michael Johnsen

GRAND RAPIDS, Mich. — Meijer and Shipt announced Thursday they will offer a store-to-door service beginning July 13 to nearly 2.5 million households throughout the Chicagoland suburbs and Rockford. The home delivery service launches as part of an expansion across six states that has so far resulted in more than 250,000 deliveries this year.    

"Our goal is to provide store-to-door convenience to as many of our customers as possible," stated Art Sebastian, VP digital shopping Meijer. "We believe that the personalized service that Shipt offers, coupled with the freshness and wide selection our customers love about Meijer, is the perfect meld of online shopping and our brick and mortar locations," he said. "Whether you're too busy or just have difficulty getting around a store, the ability to shop digitally and have it delivered when its most convenient provides a life-changing alternative to the way you've always shopped for our groceries."      

Meijer has aggressively rolled out the service since launching in Detroit last September and now offers home delivery throughout Michigan, Indiana, Ohio, Illinois and Wisconsin. The massive greater Chicagoland launch will cover more than 4,500 square miles and include more than 200 zip codes.

Shipt memberships are available for an annual fee of $99 and members have access to free delivery on all orders over $35. For orders under $35, there is a $7 delivery fee.

Using the Shipt smartphone app or placing orders from their computers or tablets, members are able to access more than 55,000 items available at Meijer stores, note any preferences, choose a one-hour delivery window and pay for their order. Fresh produce, meat, dairy, as well as hard-to-carry items like pet food, diapers and cleaning supplies can all be delivered in as litte as one hour after the order has been placed, or up to one day in advance.

To celebrate the launch of Meijer home delivery in Chicago and Rockford, Shipt is offering $25 off the first order to annual members who sign up prior to launch.

Leading up to the launch, Shipt plans to grow their network of shoppers, who are responsible for ensuring complete, accurate fulfillments of each order, and customizing orders to meet member preferences. Shipt plans to hire 10,000 people across the six-state expansion with Meijer this year.

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Fred’s sees comps drop 1.6% in June

BY David Salazar
MEMPHIS, Tenn. — Fred’s has reported its sales for fiscal June, which ended July 1, showing a 5.3% drop in year-over-year sales. It took in $197.5 million in June, compared with $208.5 million in 2016.
 
Fred’s attributed the sales dip to the recent closure of 39 underperforming stores in Q1 and pressures on its front-store business. The company also saw its comparable-store sales decrease 1.6%, compared with the over the prior-year period, which saw a 1.3% comps decrease. June comps also included a negative 0.9% impact resulting from the sale of low productive discontinued inventory.
 
Fred’s CEO Mike Bloom said that while the comps decrease was disappointing, there are bright spots in the company’s revenue streams, particularly with regard to its transformation into a healthcare company.
 
“Fred’s Pharmacy remains focused on executing the Company’s healthcare transformation,” Bloom said. “While overall comparable store sales in June were lower than we had anticipated, the results in our retail and specialty pharmacy businesses continue to be favorable, with combined pharmacy comparable sales increasing 3.5%. In retail pharmacy, we continue to see a positive shift to generic, while we consistently experience strong sales and script growth in the specialty pharmacy business.”
 
In addition to noting the results of diversifying Fred’s specialty pharmacy offerings, Bloom also noted that such efforts as introducing beer and wine in certain stores, as well as its efforts to upgrade talent and invest in technology and remodeled stores, were showing promise.
 
Bloom did note that the company no longer is expecting sequential improvement over Q1 in the second quarter, but did reiterate the company’s expectation to achieve operational profitability by year’s end.
 
“We remain committed to enhancing long-term shareholder value and will continue to execute on our strategy, including growing scripts and optimizing our supply chain and store fleet, to drive revenue growth, enhance gross margins, reduce operating expense and increase free cash flow,” Bloom said.

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