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Drug expands photo kiosk services

BY Doug Desjardins

As consumers print more of their photos at home, retail pharmacy chains are coming up with new ways to maintain their share of the photo processing market. And one way they’re doing it is with new software that allows customers to create photo books at in-store kiosks and online.

The Photo Marketing Association expected photo books to generate $389 million in sales this year, compared with $267 million in 2007 and just $81 million in 2005. And if those sales trends continue, photo books could become a $500 million a year business in 2009.

“I believe photo books will emerge from their alternative niche and become a much more mainstream product,” said Paul Worthington, senior analyst for the PMA. “Most customers will print two to six books per year, up from the one or two printed now.”

The photo book business is being driven by easy-to-use kiosk systems and online software from Kodak, Fujifilm and Hewlett-Packard that enable novice photographers to create their own photo albums.

“Some of the top trends in the photo book market include more automated software that almost instantly produces complete, professionally designed books,” Worthington said. “All the users have to do is choose their photos.”

Longs Drug and Rite Aid now use new kiosks from Fujifilm that allow users to create photo albums with dozens of images. Customers can insert a memory stick or CD with images into the user-friendly kiosks, arrange the photos and create borders and other designs. The kiosks also can be used to create calendars and other social expression items.

CVS stores use Kodak kiosks to deliver the same service. The kiosks are loaded with six photo book design schemes based on such seasonal holidays as Halloween and such celebratory events as birthdays and graduations.

But even though kiosks provide customers with a way to create photo books in stores, it appears most of the photo book business is being generated online. “We’re seeing more people creating them online and either picking them up at stores or having them delivered,” said the PMA marketing research director Dimitrios Delis. “Most people don’t want to sit at an in-store kiosk for an hour, or however long it takes, to make a photo book.”

More sophisticated kiosks are one of the key factors that have allowed pharmacy chains to boost their share of the photo processing market while other retail channels are losing theirs.

The PMA estimated that retail pharmacy is the only retail channel to build its share of the market during the past two years, from 26 percent in April 2006 to 28 percent in April 2008. During that same period, discount stores lost 7 percent of their share (35 percent to 28 percent), warehouse chains were down 7 percent (20 percent to 13 percent) and supermarkets lost 1 percent (3 percent to 2 percent).

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CVS Caremark to expand headquarters, add positions

BY Antoinette Alexander

WOONSOCKET, R.I. CVS Caremark has announced expansion plans for its headquarters over the next two years, a move that will help support the company’s continued growth and current hiring expectations of more than 200 new positions on its corporate campus.

The nature of the new jobs was not disclosed. In Rhode Island, the company currently employs 5,800 associates.

The plans are to build two new 150,000-square-foot office facilities in the Highland Corporate Park in Cumberland, R.I. The company has been based in Highland Corporate Park, which is jointly located in Cumberland and Woonsocket, since 1982. The company significantly expanded its customer support center facilities in 1988 and again in 2000.

“Our company was founded in Rhode Island more than 40 years ago and we feel fortunate to be able to continually reinvest in our home state,” stated Tom Ryan, chairman, president and chief executive officer. “As the largest company in Rhode Island we are looking to further expand our base of operations to support our continued growth and, as a result, increase our workforce over the next few years.”

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A&P announces fiscal Q1 improvements

BY Antoinette Alexander

MONTVALE, N.J. A&P, which operates 446 stores under such banners as A&P, Pathmark and Waldbaum’s, announced on Friday improved results for the first quarter as it nears the completion of the Pathmark integration.

“The first quarter of 2008 clearly demonstrates our continuing progression in operating improvement with the achievement of our fourth straight quarter of comparable store sales of over 3 percent,” stated Eric Claus, president and chief executive officer. “Further, Pathmark is already achieving positive results with comparable store sales climbing above 3 percent for the first time in many years. The company is also well underway with the completion of the Pathmark integration, as many of the planned milestones have been achieved. As of the end of the first quarter, our annualized run-rate of synergies is approximately $100 million.”

Sales for the quarter totaled $2.9 billion compared with $1.7 billion in the year-ago period. Same-store sales rose 3.2 percent, which excludes sales for Pathmark stores acquired in December 2007. Same-store sales for Pathmark, measured during the same period, rose 3.1 percent.

Net income from continuing operations was $3.8 million, with a net loss per diluted share of 48 cents after adjusting for non-operating income related to fair value adjustments. This compares with income of $61.4 million, or $1.45 per diluted share, in the year-ago period.

The company did not break out pharmacy sales results.

As previously reported by Drug Store News, the company announced during the quarter an integral step in its transformation—the conversion of the majority of SuperFresh stores in the Philadelphia market to the recently premiered Price Impact format under the Pathmark Sav-A-Center banner and a number of SuperFresh locations retaining the Fresh format with significant upgrades.

Also during the quarter, the supermarket chain completed the remodel of A&P Fresh in Holmdel, N.J., to the updated Fresh format and began remodeling additional stores. The company also premiered its Price Impact format in the Irvington and Edison Pathmark stores.

“The remainder of fiscal 2008 will be focused on progressing the company further toward operating profitability by: moving forward our operating and aggressive merchandising strategies; maintaining cost control and reduction disciplines throughout the business. Integral to our drive to profitability is the continued and ongoing execution of capital improvement projects all geared for maximum return, and particularly weighted to value propositions,” stated Claus.

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