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Rain dampens discounter’s holiday performance

BY Gail Hoffer

CITY OF COMMERCE, Calif. — Third-quarter sales growth was hard to come by at 99 Cents Only as the extreme value retailer’s heavy concentration of stores in Southern California were negatively affected by unseasonably strong rains that hit the region prior to Christmas.

Total company sales for the period ended Dec. 25 increased 1.7% to $365 million while same store sales declined 0.7%. Company CEO Eric Schiffer said the comp decline in same-store sales was due to a reduction in the average number of transactions throughout the quarter that was exacerbated by heavy rains in the company’s major Southern California markets the final week before Christmas and an early freeze and adverse weather conditions led to reduced availability of product from produce suppliers.

Aside from the weak sales performance, Schiffer indicated the company made progress on several operational initiatives.

"We are pleased with our holiday assortment as well as the sales gains in our re-merchandised party section. Although we are still in the early stages of implementation of our new store systems, which will continue for the next two years, we are satisfied with our progress to date, and our system support and reliability showed material improvement," Schiffer said. "Of paramount importance is our ability to manage our costs against the fluctuations in our same-store sales, as demonstrated by our management team in the third quarter."

The company is scheduled to report third-quarter earnings on Feb. 2 and indicated it expects earnings per share to be between 37 cents and 38 cents, compared with 35 cents the prior year. At the end of the third quarter, 99 Cents Only operated 280 stores, consisting of 208 stores in California, 34 in Texas, 26 in Arizona and 12 in Nevada.

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Food City seeks to expand Healthy Living Kitchen

BY Antoinette Alexander

KNOXVILLE, Tenn. — Grocer Food City has inked a partnership with the University of Tennessee Medical Center to expand the Healthy Living Kitchen — a move that is expected to result in a significantly greater reach for Healthy Living Kitchen programs and educational efforts at schools, community events and Food City supermarkets throughout the region.

Consisting of a registered dietitian, cardiac nurse specialist and senior executive chef from UT Medical Center, the Healthy Living Kitchen team presents healthy cooking classes and provides information on nutrition, label reading and making the right choices while grocery shopping.

The expanded Healthy Living Kitchen program will include grocery shopping tours at select Food City locations, with a UT Medical Center registered dietitian informing consumers on how to read food labels, as well as providing information about healthier choices at the grocery store.

The partnership also will allow the Healthy Living Kitchen staff to deliver the message of healthy eating to Food City’s customer base and will reach Food City’s audience through its marketing efforts at such events as NASCAR races, the Knoxville Food Show and UT sports.

"Food City is excited to partner with UT Medical Center to bring about the expansion of this much needed program," stated Steven C. Smith, Food City president and CEO. "We’re proud to be a local, family-owned company employing more than 13,000 associates. As the leading supermarket in our region, we have a responsibility to our customers, associates and community to do all we can to educate them on the importance of making wise decisions with regard to their purchases. Many of the issues that affect our health and wellness are a direct result of our eating habits — good or bad. We feel this program will work hand in hand with our NuVal nutritional scoring system to provide consumers with the added insight necessary to make more informed choices for their families."

Food City’s NuVal system scores food on a scale of 1 to 100, taking into consideration more than 30 nutrients and evaluating the dietary importance of each to determine an overall nutritional quality score; the higher the score, the higher the nutrition. NuVal scores are displayed prominently on shelf price tags, scale labels and other in-store signage featuring the trademark blue hexagon design. NuVal has researched and scored more than 35,000 items.

"With Tennessee ranking as the fourth most obese state among adults, I’m proud to announce this partnership, which represents a commitment from both organizations to address the health needs of those we serve in this community," stated Joseph R. Landsman, president and CEO of UT Medical Center. "Together, we’ll expand the message of positive nutritional choices well beyond the walls of the medical center, reaching out to so many more people in the region, including the loyal Food City customer base and the thousands of Food City associates. We’re going to make a difference on behalf of the people of east Tennessee through the education provided by the Healthy Living Kitchen.

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Boots Pharmaceutical Enterprises gears up to open pharmacies across Sweden

BY Michael Johnsen

STOCKHOLM, Sweden — Boots Pharmaceutical Enterprises, the partnership between the U.K. pharmacy chain Boots and local operator Pharmaceutical Enterprises, in the next two months is expected to open the first of 100 pharmacies across Sweden, according to a report in The Local, an English-language Swedish newspaper.

”We are busy recruiting candidates and finding premises here in Sweden,” Sverker Littorin, Pharmaceutical Enterprises chairman told the newspaper. “Everything is on track, even though it is several months later than we had hoped.”

Initially the partnership, announced in July 2010, had targeted fall 2010 for the first store opening. Boots Pharmaceutical Enterprises is planning 100 pharmacy openings — each individually owned and operated by entrepreneurs — in the next three years. According to Lennart Axelsson, Pharmaceutical Enterprises CEO, the opening of new locations should quickly ramp from there. “The response from contractors has been great,” he said in July. “In the current situation, there are more than 100 entrepreneurs who want to start the Boots Pharmacy, and some of them have been very far along in the process. It allows us to get started quickly."

Competition across the retail pharmacy industry in Sweden has intensified in the past two years since the Swedish government privatized what previously had been a state-owned pharmacy sector in November 2009. As part of that initiative, Sweden had sold more than half of its 900 Apoteket pharmacies.

Since the privatization of the industry, retail pharmacy locations have grown by 22%, according to The Local, which cited the Swedish Competition Authority. Along with the proposed 100 new stores from Boots Pharmaceutical Enterprises, Apoteket Hjärtat plans to similarly open 100 new locations in the next few years, the paper reported.

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