RETAIL NEWS

Walmart makes big push for same day in-store pickup service

BY Marianne Wilson

The discounter, which said 84% of Americans are still shopping for the holidays, is making a big push for its same day in-store pickup service. It’s made more items eligible for the service than ever before. Also, customers will be able to shop for qualifying items, notated with “Free Pickup Today,” online until 4 p.m. local time on Dec. 23. The items can be picked up in stores until 6 p.m. on Dec, 24.

Ninety percent of Americans live within 10 miles of a Walmart store, making its pickup service a fast and convenient option for customers—and a service that Amazon, even with its Whole Foods acquisition, still doesn’t come close to. The discounter said demand for “Pickup Today” orders double during the last two weeks of the season when its network of stores turn into pickup points for millions of online orders.

“We started the season by promising more,” stated Steve Bratspies, chief merchandising officer of Walmart U.S. “We know the vast majority of our customers are still shopping and there is no more important time to deliver on our promise than the final days before Christmas.”

In a new twist this holiday season, Walmart is placing unloaded gift cards in select boxes of orders placed online, encouraging shoppers who need a last-minute gift to go online and load them with amounts starting at $5. The cards will appear in Walmart.com packages for orders placed up until Dec. 17, and through Dec. 24 for Pickup orders.

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WBA takes 40% stake in China’s leading pharmacy chain

BY Michael Johnsen

Walgreens Boots Alliance on Wednesday extended its retail pharmacy acumen into China by taking a 40% stake in Sinopharm Holding GuoDa Drugstores in a deal worth approximately $416 million.

“We are very pleased to become a strategic investor in GuoDa,” stated Stefano Pessina, WBA executive vice chairman and CEO. “It is China’s leading pharmacy chain and we believe that we can positively contribute to its continued successful development with our global pharmacy expertise. We have had a presence in China for around 10 years, initially through Alliance Boots, and we are excited about the opportunity to further invest in the country’s fast growing retail pharmacy sector.”

GuoDa is a leading retail pharmacy chain in China, and has been pursuing its vision for expansion across the country in the context of the ongoing healthcare reforms and increasing importance of the pharmacy channel in the country. Deerfield, Ill.-based Walgreens Boots Alliance, as a global pharmacy-led enterprise, believes it is well positioned to provide its significant expertise to GuoDa and support its growth ambitions.

The transaction is subject to regulatory review and approval, and other customary closing conditions. Upon completion, Walgreens Boots Alliance would account for this stake as an equity method investment.

 

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Dollar General announces store growth plans, remodeling efforts

BY Marianne Wilson

The discounter will execute approximately 2,000 real estate projects in fiscal 2018. The emphasis will be on remodeling. Dollar General plans to open 900 new stores (compared to an estimated 1,285 new units in fiscal 2017), remodel 1,000 existing sites and relocate 100 stores (compared to 760 combined remodels and relocations this year).

“We continue to believe that investing in the business through our high-return new store growth is the best use of our capital to help drive long-term shareholder value,” said Todd Vasos, Dollar General’s CEO. “Our new store growth is complemented with a significant increase in our store remodel program from fiscal 2017 that we view as an investment to enhance and consistently deliver on our brand promise to help our customers save time and money every day.”

Neil Saunders, managing director of GlobalData Retail, commented that many of Dollar General’s new stores will be located in metro areas.

“This represents a slight shift in focus–but one that we believe presents Dollar General with a significant opportunity,” Saunders said. (For more, click here.)

Dollar General’s net income rose to $252.5 million, or 93 cents per share, from $235.3 million, or 84 cents per share, in the quarter ended November 3, over the year-ago period. Excluding items, the company earned 98 cents per share, beating the average analysts’ estimate of 94 cents.

Net sales increased 11% to $5.90 billion. Same-store sales rose 4.3%, which the company attributed to increases in average transaction amount and customer traffic. The company said hurricane-related sales contributed an estimated 30 to 35 basis points to same-store sales.

“During the quarter, we effectively balanced our same-store sales growth while achieving gross profit rate expansion and continuing our planned investments in the business,” said Vasos.

Dollar General narrowed its fiscal 2017 GAAP diluted earnings per share to $4.37 to $4.47, compared to its prior guidance range of $4.35 to $4.50. The current diluted earnings per share guidance range now includes the estimated net negative impact on the third quarter diluted earnings per share results of $0.05 related to the hurricanes.

For fiscal 2017, the company now forecasts net sales growth of approximately 7%, compared to its prior guidance range of 5% to 7% growth. It also forecasts same-store sales growth of approximately 2.5%, compared to its prior expectation that same-store sales would fall at the upper end of the range of slightly positive to up 2%.

Dollar General operated 14,321 stores in 44 states as of November 3, 2017.

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