Family Dollar to open 450 to 500 stores in new fiscal year; Q4 profit up 8%
MATTHEWS, N.C. — Family Dollar announced Wednesday that it plans to open 450 to 500 new stores in fiscal 2012, a 50% jump compared with the number of openings in fiscal 2011, and will renovate, relocate or expand more than 1,000 locations.
The discounter also reported that its fiscal fourth-quarter net income rose 8%.
“In fiscal 2012, we intend to accelerate investments to drive sales and profitability,” Family Dollar chairman and CEO Howard Levine said.
Family Dollar, which rejected a $7 billion takeover bid by Nelson Peltz’s Trian Fund Management LP in March, earned $79.8 million for the period ended Aug. 27, up from $74 million in the year-ago period.
Revenue rose 9% to $2.13 billion from $1.96 billion, helped by sales of consumables, seasonal items and electronics. Same-store sales rose 5.5%.
The chain exceeded Wall Street estimates, both in sales and profit.
On Tuesday, it was announced that CVS/pharmacy executive Mike Bloom would join the company as president and COO of the company.
World Retail Congress recognizes Walgreens as Retail Advertising Campaign of the Year
BERLIN — Walgreens was awarded the Retail Advertising Campaign of the Year at the Oracle World Retail Awards here at the German Historical Museum during the annual World Retail Congress held Tuesday.
The Retail Advertising Campaign of the Year celebrates outstanding advertising campaigns undertaken by a retailer to build the brand. Walgreens was selected over the competition and was awarded the prize due to its “Arm Yourself for the Ones You Love” campaign by Arc Worldwide.
Walgreens’ winning campaign stemmed from research that uncovered a subset of untapped consumers most receptive to getting a flu shot, who it called “Intender Moms,” who had every intention of getting a shot last year but didn’t. They were so busy doing things for others, so getting a flu shot for themselves became less of a priority.
By repositioning the flu shot as a selfless act — a meaningful way for a mother to show her love for the people she cares about — Walgreens created an iconic heart-shaped bandage where she could write in the names of the people she was protecting. These “Arm Yourself for the Ones You Love” badges prompted others to think about who they would get a shot for, creating a positive viral effect.
The outreach, speed and value of this campaign appealed to the judges, who felt it was a well executed example of advertising that connected with customers and produced results.
Study: Supermarket pharmacies could benefit from drug patent expiries
NEW YORK — Supermarket pharmacies could see a slight rise in gross profits next year as branded drugs lose patent protection and go generic, according to a new report by Moody’s Investors Service.
The report, released Wednesday, noted that while the lower prices of generic drugs depress pharmacies’ revenue growth, they also can help to drive margin expansion. As such, the report found that Kroger, Safeway and Supervalu could see increases in profitability as they fill more generic prescriptions. Still, reimbursement pressure from pharmacy benefit managers looking to reduce reimbursement rates for generic prescriptions could limit gains, according to the report.
"We project a low single-digit percentage increase in 2012 gross profit dollars for the three largest supermarket chains," Moody’s VP and senior analyst Mickey Chadha said. "But the overall impact of the upcoming generic drug wave on supermarkets’ bottom lines will depend on their ability to manage inflationary pressures, increasing competition from alternative food retailers and operating costs."
A number of branded drugs will come off patent over the next 14 months, including two of the top-selling drugs in the world, Pfizer’s cholesterol-lowering drug Lipitor (atorvastatin) and Bristol-Myers Squibb’s and Sanofi’s anticlotting drug Plavix (clopidogrel); these drugs had respective sales of $7.2 billion and $6.1 billion last year, according to IMS Health.
See the report here.