Albertsons' O Organics private-label products
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Albertsons’ O Organics brand passes $1B mark

BY DSN STAFF

Albertsons has a successful own brand on its hands. The Boise, Idaho-based company this week announced that its O Organics brand of USDA-certified organic products had surpassed $1 billion in sales.

The product line includes more than 1,000 products, the company said, noting that in the past year, Albertsons has added roughly 200 new products and seen the line’s sales grow more than 15%. This year, Albertsons said it plans to add 500 or more products to the O Organics line, spanning such categories as snacks, deli and baby.

“We are passionate about offering great-tasting and high-quality products to the neighborhoods we serve,” Albertsons president of own brands Geoff White said. “Introducing new and certified organic products for every eating occasion is a great example of how we are constantly delivering and staying ahead of consumer trends.”

Albertsons launched the O Organics own brand in 2005, and it manufactures many of the line’s products, including yogurt, salsa, ice cream, milk, pasta sauce and sandwich bread. The line is just one of the company’s billion-dollar brands, with Albertsons reporting thtat its Signature Select, Signature Cafe and Lucerne own brands have all passed the $1 billion mark. The O Organics brand is the company’s top-selling organic brand.

“Everyone should have the opportunity to go organic – whether you are selectively choosing a few organic products or you have fully embraced eating organics,” White said. “That’s why we offer such a wide assortment of O Organics products, from fresh fruits and vegetables to wholesome dairy and meats, cereals, snacks and more. We are honored that customers love our O Organics, and have made it not only the top-selling organic brand in our stores, but also a $1 billion brand.”

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Jean Coutu’s solid Q3 retail performance hampered by Pro Doc, Metro acquisition

BY David Salazar

Jean Coutu Group on Thursday shared its fiscal 2018 third-quarter results showing an uptick in retail performance even as the company’s generics manufacturer Pro Doc and its ongoing acquisition of Canadian grocer Metro brought down its operating income.

Retail sales from the Quebecois company’s network of 419 franchised stores — which include the PJC Jean Coutu, PJC Jean Coutu Santé and PJC Jean Coutu Santé Beauté — were $1.13 billion Canadian for the period ended Dec. 2, 2017 — up from the $1.09 billion Canadian in retail sales the company saw in Q3 2017. Total-store and same-store pharmacy sales both increased 4% — a slower rate than the year ago period. For the front end, total sales increased 2.5% and same-store sales grew 2.3%. In both pharmacy and front-end total- and same-store sales grew at a slower rate than in the previous period.

Year-to-date, though, the company is tracking ahead of where it was last year, with same-store sales up 4.7% in fiscal 2018 — more than the 2.6% growth it saw at this point in fiscal 2017. Same-store pharmacy sales have grown 6.2% so far year-to-date — more than three times the 1.9% growth posted at the same time last year. During the quarter, the company opened 3 PJC network stores, which included 2 relocations. Two stores were significantly renovated and one closed.

“Network retail sales increased significantly in the third quarter of fiscal 2018, despite a challenging regulatory environment and a highly competitive environment,” Jean Coutu president and CEO François Coutu said. “This growth demonstrates the effective implementation of our business plan. We intend to pursue the development of dynamic business strategies to ensure the evolution of our offer and contribute to the growth of retail sales.”

Despite solid retail performance, the company’s operating income before amortization, or OIBA, decreased $13.5 million Canadian to $66.4 million Canadian— down from the $79.9 million Canadian  in revenue the company saw in the prior-year Q3. The company attributed the decrease to a lower contribution from its Pro Doc generics manufacturing subsidiary, as well as $8.5 million Canadian in expenses related to its acquisition of Canadian grocer Metro.

Pro Doc’s decreased revenue was attributed partially to higher professional allowances before a ceiling was reinstated through an agreement between the Ministry of Health and Social Services and the Association québécoise des pharmaciens propriétaires, and partially to a $5.5 million non-recurrent expense related to inventory that was the result of an agreement between the Canadian Generic Pharmaceutical Association and the Quebec government.

With regard to its Metro acquisition, Jean Coutu said it expects the transaction — which will see it pay $4.5 billion Canadian for the grocer — to close in the first half of 2018.

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Sam's Club
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Sam’s Club closing stores in strategy realignment

BY David Salazar

Walmart will be closing several of its Sam’s Club stores, the retailer announced Thursday. The company is set to close 63 stores this year, with plans to convert as many as 12 of them to e-commerce fulfillment centers with the aim of speeding up its online order delivery.

According to company leadership, the closings — which will bring Sam’s Club’s store count to 597 clubs — are part of an effort to remain competitive.

“Transforming our business means managing our real estate portfolio and Walmart needs a strong fleet of Sam’s Clubs that are fit for the future,” said John Furner, president and CEO of Sam’s Club. “We know this is difficult news for our associates and we are working to place as many of them as possible at nearby locations. Our focus today has been on those associates and their communities, and communicating with them.”

Sam’s Club said that the first store to be converted into a fulfillment center will be in Memphis, Tenn. Walmart will be providing pay and resources to affected employees, as well as 60 days of pay and severance to those eligible. As part of the company’s Thursday announcement to raise wages and improve benefits, as well as offer bonuses to certain eligible employees, eligible Sam’s Club employees affected by the closings will be able to claim them, the company said.

“We need great people to help lead us into the future and we hope that many of them will stay with the company at either a local store or club,” Furner said. “Change is never easy, but we’re making these decisions as part of running a healthy business.”

The announcement of the closures and conversions came on the heels of the retirement of Sam’s Club’s senior vice president and GMM of consumables and health and wellness Jill Turner-Mitchael.

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