Duane Reade reports 3Q front-end, Rx sales increases
NEW YORK Total net sales increased 5.4 percent to $431.0 million during the third quarter, the company reported, up from $408.8 million in the year-ago period. Total same-store sales increased by 5.0 percent. Duane Reade opened four new stores, during the period, and finished the quarter with a total of 245 stores versus 241 stores one year ago.
Total front-end sales actually increased 6.7 percent over the prior year period, driven by continued growth in the food and beverage categories, over-the-counter products, and health and beauty care items, the company noted. The company reported a 30-basis-point benefit on the OTC switch of Zyrtec alone. In addition, the rise in the local sales tax on cigarettes in June resulted in a 1.1 percent benefit to front-end sales during the quarter—however, since it is a tax none of that reached the company’s bottom line.
On the pharmacy side of the business, Duane Reade executives cited increased Medicare Part D sales and increases in average prescription prices. On the downside, the Zyrtec switch negatively impacted pharmacy same-store sales by approximately 60 basis points. Increased generic substitution also weighed on pharmacy comps during the third quarter.
Overall, however, Duane Reade reported a net operating loss of $22.3 million up from $22.1 million, in the previous year.
During the quarter, which ended Sept. 27, gross margin expanded to 31.3 percent, compared with 30.6 percent in third quarter 2007 for the New York-based retail pharmacy chain. At the same time, however, net loss increased to $22.3 million, from $22.1 million a year ago.
“We are encouraged by our results for the first three quarters of 2008 and by our continued progress despite the difficult environment,” Duane Reade chairman and chief executive officer John Lederer said. “That said, we recognize that weakening external conditions have begun to have an impact on our business and we expect that this will continue in the near-term. However, we are cautiously optimistic about the outlook for the business and believe that by executing on our strategic initiatives we will continue to advance our business successfully. Be assured that we will be pragmatic and methodical in our approach and will take into account the potential challenges presented by the macro economy.”
Officials gather to respond to growing concerns over organized retail crime
NEWARK , Calif. More than 200 law enforcement, government officials and retail loss prevention professionals gathered here last week for the Northern California Organized Retail Crime Conference to tackle critical issues like organized retail crime, as well as provide a forum for concerned professionals to come together to support each other and discuss proposed legislation to combat the existing and ever-growing threat of ORC.
At the top of the attendees’ varied list of concerns was ORC’s impact on consumers during a turbulent economy. “We learned today that approximately 25 million workers, or 1 in 5 people, in our nation’s work force is related to the retail economy,” stated Dan Reynolds, vice president of sales for USS Corp., which hosted the event. “One aspect of this issue that consumers do not fully understand is that the cost of stolen items or the financial loss to retailers is not the only loss. When criminals steal in large quantities, which is the reality of organized retail crime, we lose sales tax dollars that could be used for law enforcement, schools, parks and roads,” he said.
In 2007, total dollars lost in California due to evaporated sales tax dollars was estimated to be $242 million.
The keynote speaker was California Sen. Leland Yee, D-San Francisco, who has promised to re-introduce legislation that would impose more stringent penalties on those convicted of ORC theft. “This is a lot more serious than just shoplifting because of the organization and sophistication,” he said.
“Our legislative efforts need to start by redefining ORC as more than mere shoplifting,” Reynolds said. “Given the fact that we are in a harsh economy and that paychecks are smaller and smaller, we need to work with the legislature to protect our citizens.”
Warner Home Video releases ‘Any Given Sunday’ on Blu-Ray
BURBANK, Calif. The Oliver Stone-directed “Any Given Sunday” director’s cut makes its Blu-Ray High-definition debut Jan. 27, with the Warner Home Video release timing set to coincide with the Super Bowl. Starring Al Pacino, Cameron Diaz, Dennis Quaid, Jamie Foxx, LL Cool J, James Woods, Ann-Margret, Dick Butkus, Jim Brown, Lawrence Taylor and Charlton Heston, the director’s cut includes commentary by Stone and Foxx, HBO’s “Making Of ‘Any Given Sunday’ First Look,” a gag reel and 14 deleted or extended scenes, along with a Jamie Foxx audition tape.
Suggested retail price is $28.99, and order due date is Dec. 23.