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Rite Aid comps increase 1.1% in May

BY Alaric DeArment

CAMP HILL, Pa. — Rite Aid’s same-store sales increased by 1.1% in May, a lower-than-expected increase that may be due to underlying economic and industry factors.

The results for the five weeks ended June 2 included a 1.3% increase in front-end comps and a 1% increase in pharmacy sales over May 2011. Same-store prescription count increased 2.6%. Total drug store sales for the period increased 0.3% to nearly $2.5 billion, compared with $2.45 billion in May 2011.

Credit Suisse analyst Edward Kelly had projected that Rite Aid’s comps would increased by 2% to 2.5%, thanks in part to continued weakness from Walgreens. Nevertheless, front-end comps were expected to remain "lackluster" due to weak underlying pharmacy traffic for the industry, economic problems, such as decelerating inflation and challenges to consumers and competition from mass merchandise and dollar stores.

Kelly also has projected that pharmacy script growth would increase but remain weak. In mid-May, IMS Health reported that year-over-year script growth only marginally increased, having been roughly flat in April. At the same time, deflation due to generic drug utilization accelerated even as branded drug inflation remained strong, though Kelly noted that generic utilization results in greater gross profit dollars per script.

The growth in comps for the month also failed to meet Guggenheim Partners’ projected growth of 2.2%, but Guggenheim analyst John Heinbockel wrote that the lighter growth would not alter his opinion that Rite Aid would continue to see accelerated EBITDA growth through the end of 2013 due to Wellness+ and other factors.

Results for the 13-week period ended June 2  were somewhat better, with comps increasing 2.5%, including a 2.7% increase in front-end comps and a 2.4% increase in pharmacy comps, as well as a 3% increase in prescription count at comparable stores. Total sales for the period increased 1.8%, to $6.4 billion, compared with $6.3 billion last year.

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Milky Way debuts chocolate ice cream bars

BY Allison Cerra

HACKETTSTOWN, N.J. — Mars Chocolate is bringing a new treat to the frozen food aisle.

New Milky Way chocolate ice cream bars are made with chocolate ice cream, a layer of caramel and covered with a smooth milk chocolate coating to deliver the classic Milky Way bar taste, the company said. The treat now is available at stores nationwide.

In line with the launch, Milky Way has hit the road with a limited-edition Milky Way chocolate ice cream truck, which will make stops at the Exposition Park (adjacent to the California Science Center) in Los Angeles on June 8, followed by stops in such locations as Houston and Chicago. On hand for the summer tour will be "The Big Bang Theory" actor Kunal Nayyar.

"We’re so excited to launch the new, out-of-this-world Milky Way chocolate ice cream bars this summer," Mars Chocolate North America general manager Craig Hall said. "And, the ice cream truck tour will help us bring the popular Milky Way taste along with our delicious chocolate ice cream to fans across the U.S."

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Boulder Canyon Natural Foods introduces Canyon Cut chips

BY Allison Cerra

PHOENIX — Boulder Canyon Natural Foods has expanded to include a line of kettle cooked, ridged potato chips.

Canyon Cut chips include totally natural (original), sour cream and chives, and honey barbeque flavors. Like all Boulder Canyon snacks, the new and improved Canyon Cut line features only natural ingredients and contains no trans fats, no cholesterol and no MSG. In addition, they are gluten free, Non GMO and Kosher certified.

The new kettle cooked chips arrive in stores this month with a suggested retail price range of $2.99 to %3.29 per 6.5-oz. bag.

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