NACDS takes the offensive on many fronts
The National Association of Chain Drug Stores’ two top executives emphasized the association’s commitment to the success of retailer and supplier members amid times of dramatic change during its business program on Sunday morning, the second day of the three-day NACDS Total Store Expo event in Denver.
The officials, NACDS chairman Mark Panzer, and president and CEO Steve Anderson, also delivered a message to Washington decision-makers and opinion leaders that the emerging trade war jeopardizes businesses’ efforts to transform and thrive in ways that benefit employees and consumers.
Panzer, who is senior vice president of pharmacy, health and wellness of Albertsons, described the value that NACDS members appreciate most. “In short, it’s about business community and intelligence, it’s about effective government advocacy, and it’s about powerful and practical information on policy,” he said.
He also described his personal experience of benefiting from relationships within his company and from collaboration with business partners. He said companies can take this to the next level by achieving “the vision that NACDS Total Store Expo can foster conversations for the entire store: pharmacy and the front-end; health and wellness; technology; distribution and logistics.”
Panzer also drew from his experience in describing NACDS’ value in government advocacy. “I learned something in the early days of my career that reinforces the importance of advocacy,” he said. “What I learned, and what is reinforced for me every day, is just how important pharmacy is to people or patients, and to the communities they serve. Pharmacy is worth fighting for.”
He described successful work throughout 2018 in expanding pharmacists’ immunization authority, fostering medication synchronization and enhancing the ability of pharmacists to furnish medications. He also reported on the status of NACDS’ work with other trade associations to advance direct and indirect remuneration, or DIR, fee reform.
On the topic of opioid abuse prevention, Panzer described progress on NACDS’ policy recommendations — including requiring electronic prescribing of controlled substances to help stop fraud and abuse. “It was not that long ago that NACDS was on the leading edge of urging and collaborating with the Drug Enforcement Administration to allow e-prescribing of controlled substances. Now, it’s not just about allowing it — which took effect in 2010. Now, we’re working to mandate it. We have moved from a question of ‘may’ to a question of ‘mandatory,’” he said.
In addition to echoing Panzer’s focus on DIR fee reform and on expanding pharmacy’s ability to serve patients with newer services, Anderson described NACDS’ approach to leveraging Total Store Expo as a call to decision-makers and opinion leaders in Washington to avert the emerging trade war. “It has already involved tariffs on billions of dollars of goods, and has targeted hundreds of billions of dollars more,” he said.
“The emerging trade war is on the minds of those doing business here at the NACDS Total Store Expo, and on the minds of consumers,” he said. “Diverse products, packaging and equipment already are being affected. There are increased freight costs, too. This matters to the entire supply chain. It affects the products on store shelves; it affects the process of getting those products to the shelves; and it even affects the shelves themselves, given rising steel costs.”
Editor’s note: Retail’s robust growth
All is well in the world of retailing. At least said the influential, and I might add usually correct, National Retail Federation. The Washington-based association increased its retail sales forecast for the entire year earlier this month, now saying that volume will increase in 2018 over 2017 numbers by a minimum of 4.5%, instead of the 3.8% to 4.4% range it had earlier predicted.
The association said that tax reform, a strong economy and other economic factors are helping retailers — and many other businesses — outperform expectations. A strong fourth quarter, which many expect, could make this the best year for retail in more than a decade.
“Higher wages, gains in disposable income, a strong job market and record-high household net worth have all set the stage for very robust growth in the nation’s consumer-driven economy,” said NRF president and CEO Matthew Shay in a press release. “Tax reform and economic stimulus have created jobs and put more money in consumers’ pockets, and retailers are seeing it in their bottom line. We knew this would be a good year, but the first half turned out to be even better than expected. However, a tremendous amount of uncertainty about the second half remains. It could be a banner year for the industry, or we could keep chugging along at the current rate.”
The association did throw one caveat in there. It warned that tariffs, a product of the growing trade war between the Trump administration and Europe and China, could dampen consumer confidence in the last quarter of the year.
I think the association is spot on with its forecast. My barometer, a much less scientific one that basically follows how crowded my neighborhood supermarket’s parking lot is, agrees wholeheartedly with the NRF’s prediction. With unemployment at near historic lows, wages increasing by a small (but respectable) number and consumer confidence high, shoppers are out and about spending money.
Great news for all retailers, whether brick-and-mortar or the new digital players. Consumers love to spend when they think times are good and, for now at least, times seem to be very good. Retailers need to take advantage of this while they can by offering as many choices as possible to get shoppers to trade up and buy more.
Retailers also have to watch for any change in head winds. While sales are booming, competition is still becoming more and more fierce as more players seek to gain the consumers’ attention, not to mention their wallets. Also, the aforementioned trade wars and higher-than-expected inflation numbers could throw a wrench into this well-oiled economic engine. And, we can never forget about oil prices and the possibility of the return of $4 and $5 a gallon gasoline.
Still, these are heady times for retailers. Enjoy them while they last, but remember to put some money away for a rainy day. It is going to come eventually, but hopefully not too soon.
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