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Nutrisystem adjusts retail offering with weight-loss kit exclusive at Walmart

BY Michael Johnsen

FORT WASHINGTON, Pa. — Nutrisystem executives on Wednesday told analysts they were bullish around expanding their weight-loss meal delivery service into mass retail through its partnership with Walmart. Initially beginning with 500 Walmart doors in January, the company recently expanded the offering to 2,000 stores and climbing

"Because of our initial success, we’ve now expanded … and expect to continue to expand throughout 2013," Dawn Zier, president and CEO, told analysts during the company’s 2013 first-quarter conference call. 

But this isn’t the first time Nutrisystem has tried to crack the retail code with its weight loss offering — the company launched a retail product across more than 2,000 Kroger shelves last year that generated somewhat less fanfare. 

However, Nutrisystem is taking a different approach to its retail offering this time around with a trial offering emphasizing weight loss as opposed to a maintenance program designed to sustain pursuit of a healthier lifestyle. 

"Kroger itself was not a bad channel for us to be in," Zier said. "The issue is that we won some market in Kroger with the wrong product, doing the maintenance and within weight management products where we’re obviously finding our strength in the weight loss kit [at Walmart]." 

Nutrisystem launched its 5-Day Jumpstart Your Weight Loss Kit exclusively at Walmart on April 22. "[This] represents a significant departure from our traditional 28-day program," Zier said. "We are experiencing very positive results from our Walmart retail lines that expanded our footprint in their stores," she added. "In addition to our core 5-Day Kit, our ‘D’ kit targeted to individuals with or without Type 2 diabetes is also performing well."

Nutrisystem’s retail offering is now trial friendly, which may lead to more dieters signing on for Nutrisystem’s more comprehensive maintenance program. "We’re seeing repeat business at Walmart as well as multiple kit purchases indicating that customers are seeing good results and listing other family members to diet with them. This is an early win for us in 2013," Zier said. "We are actively developing our retail product line and we expect to have additional product and kit to launch in retail for the 2014 diet season."


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Investments in omnichannel, loyalty program highlighted at Sears Holdings shareholder meeting

BY Alaric DeArment

HOFFMAN ESTATES, Ill. — Among the highlights of the first Sears Holdings shareholder meeting since Edward Lampert became chairman and CEO were details on the company’s progress in combining its brick-and-mortar and online businesses.

Sears, which operates the Kmart mass merchandise chain, uses the term "integrated retail" to refer to the integration of its businesses, noting that is where half of its online business comes from as customers buy online and pick up in-store and order in the store and ship home. Online sales increased by 25% in the fourth quarter and 17% in fiscal year 2012, the company said in February.

Ordering in the store and shipping home got a lot of attention recently with Kmart’s popular "Ship My Pants" ad, which despite some criticism for its use of toilet humor, has since gone viral with more than 20 million views on YouTube and a promotion for its creator. According to the company, "Ship My Pants" became the sixth most viral U.S. ad of all time and the 17th most viral worldwide, with coverage on CNN, ABC’s "Good Morning America" and other outlets.

Meanwhile, the company is launching new tablet and mobile apps, SHOPSears and SHOPSears Lite, which it said are now live in more than 350 Sears stores, with 40 planned for this year. More than 1.5 million transactions and $550 million in sales were processed through the apps in fiscal year 2012. Member Assist, a new app for the Shop Your Way rewards program, was rolled out last month.

The program has helped drive sales for the company as well, with 60% of sales at Kmart and Sears coming from members, and annual sales per member increasing by more than 8% as members spend 18% more than non-members.


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Rite Aid comps decrease amid earlier Easter, new generics

BY Alaric DeArment

CAMP HILL, Pa. — Rite Aid’s same-store sales decreased 4% in April compared with April 2012 due to an earlier Easter and introductions of new generic drugs, the retail pharmacy chain said Thursday.

The numbers released Thursday included a 3.5% decrease in sales on the front end and a 4.2% decrease in pharmacy sales, but the pharmacy figure included a 4.54% negative effect due to new generics. Same-store prescription count decreased by 0.2%.

Total sales for the month were $1.902 billion, a 4.6% decrease over April 2012’s $1.993 billion.

Same-store sales for the eight-week period that ended Saturday decreased by 3%, including a 0.1% increase in front-end same-store sales and a 4.4% decrease in pharmacy same-store sales. Same-store prescription count increased by 0.1%.

Total store sales for that period were $3.841 billion, a 3.5% decrease over the same period last year, when sales were $3.982 billion.

 

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