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Auto replenishment potentially makes CVS/pharmacy’s Family Vitamin Center a supplement gamechanger

BY Michael Johnsen

With the launch of Family Vitamin Center, CVS/pharmacy created a new health hub on CVS.com to help educate customers on the vitamins and supplements that can support their personal health goals. The site is designed to declutter the dietary supplement aisle with features like an interactive questionnaire and guidance tools that provide personalized supplement recommendations. It also allows users to shop by goal, such as heart health or immune support, and get the latest health tips. And perhaps most important, there’s an automatic replenishment program. 

It’s a smart play. Those who supplement regularly fall into one of two categories — they’re supplementing as part of a major lifestyle improvement change, or they’re supplementing because they’re already living that healthier lifestyle. In either case, you’ve got a consumer looking for — and willing to pay for — healthier solutions. CVS/pharmacy is positioning itself to be that solution. 

According to a Council for Responsible Nutrition survey, 68% of adults take dietary supplements, and those supplement users are more likely than non-supplement users to also engage in certain other healthy habits, which is otherwise known as, they’re in the market for healthy solutions. The demographics are nice, too. According to the National Health and Nutrition Examination Survey, half of everyone between the ages of 31 and 50 supplement. And 65% of anyone between the ages of 51 and 70 supplement. 

And more and more, these healthier lifestyle consumers are shopping online. In GNC’s last quarterly conference call, president and CEO Joseph Fortunato noted that GNC’s online growth trajectory is double that of the e-commerce industry growth rates, which was running pretty close to 15%. 

But the kicker in all of this is the automatic replenishment program. It’s a feature that borrows successfully from the subscription-based services of Amazon.com, Dollarshaveclub and others. Sales of vitamins and diet aids — which represent the kind of chronic needs for which Amazon’s subscription service "Subscribe & Save," and now CVS/pharmacy’s Family Vitamin Center, would become a differentiated convenience — account for more than 29.2% of all OTC medicines sold and represent $10.2 billion in sales.

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Share of sales from Shop Your Way members grows as Q4 2013 comps have fallen, Kmart parent company says

BY Alaric DeArment

HOFFMAN ESTATES, Ill. — Kmart’s same-store sales have taken a tumble this quarter as its parent company says it is continuing to focus on transforming itself into a retailer focused on members of its loyalty card program.

Sears Holdings said that comps at Kmart fell by 5.7% during the nine-week period that ended Monday, while year-to-date comps as the mass merchandise retailer declined by 3.7%. Meanwhile, Sears U.S. stores had comp declines of 9.2% and 4.2% during the same period, for total declines in both chains of 7.4% and 3.9%. Sears’ Canadian stores reported a quarter-to-date 4.4% decline in comps. Adjusted EBITDA for the fourth quarter is expected to be between negative $65 million and $65 million, compared with $429 million in the fourth quarter last year, while the company expects to have a quarterly loss of $250 million to $360 million, and a fiscal 2013 loss of $811-914 million. The company’s fourth quarter 2013 ends on Feb. 1.

The company said it was making progress toward becoming a "member-centric integrated retailer" through the Shop Your Way loyalty program, with 69% of sales during the quarter so far coming from members, compared with 58% during the same period last year.

 

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Walgreens declares regular quarterly dividend of 31.5 cents per share, a 14.5% increase

BY Michael Johnsen

DEERFIELD, Ill. — The board of directors of Walgreens on Thursday declared a regular quarterly dividend of 31.5 cents per share, a 14.5% increase over the year-ago dividend. 

The dividend is payable March 12, 2014, to shareholders of record on Feb. 18, 2014.

Walgreens has paid a dividend in 325 straight quarters (more than 81 years) and has raised its dividend for 38 consecutive years. Over the last five years, Walgreens annual dividend rate has increased from 45 cents per share to $1.26 per share, resulting in a compound annual growth rate of nearly 23%.

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