RETAIL NEWS

The Exchange’s retail mission supports soldiers worldwide

BY DSN STAFF

The Exchange is focused on fulfilling its retail mission in supporting active duty personnel, the military retailer told leadership Wednsday.

Gen. Gustave Perna, Commanding General of the U.S. Army Materiel Command and the Army’s senior logistician, met with Army & Air Force Exchange Service director and CEO Tom Shull and senior Exchange executives. The meeting helped lay the foundation for how AMC sees the Exchange fitting into its logistical footprint, the Exchange said. Perna and Shull also discussed how AMC and the Exchange can more effectively support soldiers.

Shull briefed Perna on the Exchange’s retail mission. Shull discussed how the Exchange’s BE FIT program supports soldier readiness and resiliency through a large selection of fitness products in store and at ShopMyExchange.com; the expansion of MILITARY STAR card acceptance at commissaries; and the veterans online shopping benefit. The shopping benefit, which launched last Veterans Day, welcomed home 18.5 million honorably discharged Veterans with tax-free shopping and military exclusive pricing at ShopMyExchange.com.

“Meetings like these are very helpful,” Perna said. “It’s good for me to be informed on what we are or are not doing.”

Perna, the second four-star general to visit the Exchange in the last two years, understands the importance of the Exchange, having served on the Exchange board of directors from January 2015 to September 2016, including about a year as board chairman. As commander of AMC, Perna oversees superior technology, acquisition support and logistics to ensure dominant land force capability for soldiers, the United States and its allies.

“It’s a great privilege to have a soldier’s soldier such as Gen. Perna in the Exchange’s corner,” said Shull. “He understands the unique challenges that we face and we truly appreciate all that he does for the Exchange.”

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Ahold Delhaize CEO gives 4 reasons why ‘stores still matter’

BY Michael Johnsen

Companies that can set themselves apart in a crowded landscape will be able to stay ahead, Ahold Delhaize CEO Dick Boer, said during a speech during the Zaandam, Netherland-based retailer’s annual general meeting. The pace of change has accelerated significantly during the seven years he’s served as CEO, and the role of retail is changing thanks to the influence of digital, Boer said.

But that doesn’t mean retail is going away.  Boer outlined four points of differentiation key to the success of each of Ahold Delhaize’s banners. The outgoing CEO said that each of Ahold Delhaize’s banners delivers on shopping experience, uses its expertise in fresh and healthy to benefit the shopper, uses online and digital personalization tools and maintains a leading position in terms of technology and implementing innovation.

Of these four points of differentiation, Boer said experience is perhaps the most critical to the success of a retailer. “Stores still matter,” he said. “And that will be the case in the future, too. The more virtual the world becomes, the more need there is for the real world. Because people are social animals. They like to meet other people. They like to be surprised and inspired. They like to touch, feel and smell new and fresh products.”

Regarding the promise of fresh and healthy, Ahold Delhaize is the only retailer with a goal of having half of all own-brand sales originate from better-for-you products by 2020, Boer said. “We are also making our existing own brands healthier. For example, Stop & Shop, Giant/Martin’s and Peapod reduced the sugar content in their own-brand products by almost 1 million pounds last year.”

Personalization is another key factor that Boer expects will contribute to Ahold Delhaize’s future growth. For example, Food Lion’s Shop & Earn program, referenced in the video above, gives customers an opportunity to earn money back after they’ve capitalized on personalized offers. “Last year, our brands sent out no less than 2.5 billion personal offers worldwide,” Boer said. “Meanwhile, we continue to invest in personalizing the shopping experience even further.”

Finally, technology enables Ahold Delhaize to bring to life many of its market differentiators. He used the example of a Peapod shopper who, despite being blind, was able to use the recently rolled out Ask Peapod voice ordering service as “a great example of how we can continue to reach more customers by using technology.”

Though the tools Ahold Delhaize’s brands are using to retain their customers are new the needs they’re meeting are not, he said.

“Ten years ago, you needed to visit several stores to find the lowest price for a bottle of Coke. Now, you can find the lowest price across five different stores within a few seconds. Ten years ago, only pizzerias offered home delivery. Now, it is perfectly normal to have groceries and restaurant meals delivered right to your kitchen,” Boehr said. “But at the same time, there are some things that never change. One hundred years ago, fine, local products and good personal service were important. That is still the case a century later. A hundred years ago, customers wanted the best quality at the best price. And that will still be the case 100 years from now.”

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Rite Aid revenues drop 6% in FY2018

BY Michael Johnsen

Rite Aid posted revenues of $21.5 billion for its fiscal year ended March 3, on Thursday, marking a decline of 6.1%. Retail pharmacy segment revenues totaled $15.8 billion for the year, which was a decrease of 5.6% that the company primarily attributed to the extra week in the prior-year period and a decline in same-store sales. Revenues in the Camp Hill, Pa.-based company’s pharmacy services segment were $5.9 billion, a decrease of 7.8% compared to the prior year, which was due to a decline in commercial business and to the change in the composition of Medicare Part D membership, Rite Aid said.

Same-store sales from continuing operations for the year decreased 2.9%, consisting of a 3.9% decrease in pharmacy sales and a 0.8% decrease in front-end sales. Pharmacy sales included an approximate 187 basis point negative impact from new generic introductions.

Same-store prescription fills, adjusted to 30-day equivalents, decreased 1.8% over the prior year due in part to the company’s exclusion from certain pharmacy networks that Rite Aid it had been part of in the previous fiscal year. Prescription sales from continuing operations accounted for 65.9% of total drug store sales, Rite Aid said.

For the fourth quarter of fiscal 2018, Rite Aid reported net income of $767.1 million, or 73 cents per diluted share, compared with a loss of $21 million, or 2 cents a share, in the year-earlier period. However, Rite Aid beat analyst estimates. The company’s loss from continuing operations came to 46 cents a share, or adjusted EPS of 2 cents a share, compared with a FactSet consensus for a loss of 3 cents a share. While revenue fell to $5.7 billion for the quarter, that was ahead of the FactSet consensus of $5.6 billion. Shares fell 1.2% in pre-market trading.

For the full year, the company reported net income of $943.5 million, or 90 cents per diluted share.

Rite Aid has much to look forward to in the coming year, executives said. “We are pleased that we’ve been able to drive improved operational performance through a stabilization of reimbursement rates, improvements in drug purchasing costs and a record number of immunizations which helped us deliver a higher pharmacy margin for the [fourth] quarter,” Kermit Crawford, Rite Aid president and COO, said. “These areas of our business will continue to be key priorities as we begin our new fiscal year and work together to continue building momentum.”

Rite Aid chairman and CEO John Standley noted that the retail pharmacy segment improved its earnings before interest, depreciation and amortization over the prior year. He also noted that its pharmacy services segment, which encompasses its EnvisionRx pharmacy benefits manager was kicking off the commercial selling season strongly on the heels of Rite Aid completing its transfer of 1,932 stores to Walgreens Boots Alliance and ahead of its merger with Albertsons. Standley said the merger would “transform Rite Aid into a truly differentiated leader in food, health and wellness,”

With the store transfers complete, the company said that its transfer of the three distribution centers and related inventory is expected to begin after Sept. 1. Rite Aid said it expects the Albertsons merger to close early in the second half of this year, pending shareholder and regulatory approval and closing conditions. Both companies’ boards of directors have approved the deal and a key regulatory waiting period recently expired.

Rite Aid said it expects sales for the coming year to be between $21.7 billion and $22.1 billion in fiscal 2019, with same-store sales expected to range from flat to an increase of 1% over fiscal 2018, the company reported. That forecast does not include the pending merger with Albertsons, however. Net loss for the year is expected to fall between $40 million and $95 million.

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