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Nielsen unveils retail forecast report at conference

BY Allison Cerra

LAS VEGAS Drug stores will experience an increase in dollar sales but will suffer share losses by 2015, research firm Nielsen projected in its new retail forecast, which was unveiled at its Consumer 360 Conference in Las Vegas.

While the Nielsen Retail 2015 Forecast predicted that both mass supercenters and e-commerce would be the big winners by dollar share gains, growing by a combined five share points between 2009 and 2015, the report also underscored how technology, marketing trends and retail formats are converging to redefine how consumer packaged good retailers and manufacturers interact with consumers. One example of this, the report said, was the use of smart phones to engage consumers and help them make better shopping choices, a trend already underway. According to Nielsen, smart phone penetration stands at 23% of all mobile subscribers and is expected to overtake feature phones in the United States by the end of 2011. Nielsen predicts that by 2015, smart phones will be the primary enabler of consumer shopping engagements and new technology innovations will generate additional opportunities for retailers and manufacturers.

Among the forecast’s predictions included:

  • Warehouse club, dollar store and pet store will also grow share positions
  • Supermarkets will continue to lose share, but at a declining rate
  • Other key consumer packaged goods channels, including drug stores, mass merchandisers and convenience stores, will grow dollar sales but will suffer share losses.

“Today’s big players will only grow bigger,” said Hale. “Industry change will grow faster and more intense in the next five years, requiring advanced, future-focused change management skills among CPG professionals.

“When technology enables consumers to quickly locate the best price in their area, retailers will be forced to compete and differentiate themselves through factors other than price,” added Hale. “We’re at the beginning of a whole new world when it comes to consumer online and social marketing, and companies need to be developing and updating their digital and social media strategies now to remain competitive.”

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Stock repurchase program at CVS Caremark approved

BY Allison Cerra

WOONSOCKET, R.I. CVS Caremark has announced that its board of directors has approved a new share repurchase program for up to $2 billion of its outstanding common stock.

The share repurchase authorization expires at the end of 2011 and permits the company to effect the repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase transactions and/or other derivative transactions.

The company also stated that during second quarter 2010 it repurchased approximately 16.7 million shares of common stock for approximately $613 million, completing the $2 billion repurchase program authorized in November 2009.

Dave Denton, EVP and CFO of CVS Caremark, stated, “We’re very pleased with the board’s approval of this new share repurchase program and believe it reflects well-placed confidence in the future growth of CVS Caremark’s business and an ongoing commitment to increase shareholder value. We’re very focused on the efficient allocation of capital and we will continue to invest in internal projects that meet our return hurdles and use the rest of our remaining free cash flow to increase shareholder value.”

Denton continued, “Over the next five years, we expect to generate significantly more free cash flow than what we’ve generated in the past five years, and we expect to use the majority of that free cash flow in the near-term to enhance shareholder returns through dividends and share repurchases. We intend to continue to review our dividend annually and do share repurchases that are value enhancing.”

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Bartell launches contest in line with anniversary celebration

BY Alaric DeArment

SEATTLE As it gears up to celebrate its 120th anniversary this year, Bartell Drugs is launching a “Magical History Tour” contest at its stores, the regional retail pharmacy chain said Monday.

Bartell, the oldest operating retail pharmacy chain in the country, is collaborating with HistoryLink.org and The Seattle Times’ “Newspapers in Education” program. The contest will focus on facts about the history of the Puget Sound area, the section of Washington state that includes the area around Seattle and King, Snohomish and Pierce counties.

Through Aug. 23, a new clue will be released each Monday at HistoryLink.org/Bart and in the Monday edition of The Seattle Times. “Bart,” Bartell’s historic delivery truck character, will provide clues to historical sites in the Puget Sound area where answers can be found. Contestants submitting weekly answers will be entered into drawings for prizes, which will include a family pass to Seattle’s Woodland Park Zoo.

“This fun activity is both an opportunity to learn something about our area and a way of getting the family out and about this summer in an enjoyable way,” Bartell chairman and CEO George Bartell said.

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