Fred’s reports results for 3Q 2008
MEMPHIS, Tenn. Fred’s on Wednesday posted total sales of $418 million for its third quarter ending Nov. 1, representing a decline of 0.4 percent as compared to the third quarter of 2007.
On a comparable store basis, third quarter sales increased 1.4 percent.
“We move into the fourth quarter well prepared both financially and operationally,” stated Michael Hayes, chief executive officer of Fred’s. “With all the white noise surrounding the state of the economy, the fourth quarter is certain to be exciting. Despite the uncertainties, the market niche we serve and the ongoing success of our sales and operational initiatives put us in a good position to continue building market share.
For next year, Fred’s is scaling back expected benefits from generic prescriptions dispensed, in part because there will be fewer blockbuster drugs approaching patent expiration. “As we look into 2009 as far as a generics picture, we have, for planning purposes, back off slightly from where we had seen historical trends,” Rich Chambers, Fred’s executive vice president of pharmacy operations, said. “We don’t see the blockbuster drugs that we’ve historically seen back in ‘06/’07 and in the first part of ’08. … But in 2010, 2011 and 2012, when we see some of the bigger names coming off, we would expect [generic utulization] to ramp back up slightly to the numbers that we’re seeing currently as well as in the last year or two.”
Excluding stores closed in 2008, total sales from ongoing stores increased 4 percent over the third quarter of last year, the discount retailer reported.
The company’s average market-basket increased 4.5 percent to $18.80, the retailer reported. “Inventory turns improved to 3.8 turns, from 3.7 at the same time last year, and it is anticipated that we will end this year at 3.9 turns,” Jerry Shore, Fred’s executive vice president and chief financial officer, stated during a conference call with analysts Wednesday morning.
During the third quarter, Fred’s opened one new store and two new pharmacies. For the year-to-date period, the company has opened 17 stores and five pharmacies.
In the fourth quarter, Fred’s expects total sales to fall between 2 percent and 4 percent, reflecting the closing of the 75 stores and 22 pharmacies in line with the company’s planned restructuring program. Comparable store sales are expected to be flat for the quarter with strong consumables sales offset by weaker sales in discretionary departments.
Jean Coutu Group launches services, gift card sales online
LONGUEUIL, Quebec The Jean Coutu Group on Tuesday launched a new service that allows the purchase of Jean Coutu Gift Cards online.
“The Jean Coutu Group is very proud to offer to Internet users this new service which is available as of today and for all occasions throughout the year,” said Alain Lafortune, senior vice president of purchasing and marketing at Jean Coutu. “This initiative is a first in the retail pharmacy industry in Quebec; it corresponds to our vision and demonstrates our commitment to provide added value to our customers.”
Several selections of gift cards are being offered, the Canadian retailer stated. In addition, the gift card chosen will be inserted in a greeting card which the sender may personalize.
Rite Aid launches Holiday Gift of Savings program
CAMP HILL, Pa. Rite Aid on Tuesday announced the introduction of its Holiday Gift of Savings program, which began Nov. 16 and runs through Dec. 24, where shoppers can receive a Rite Aid gift card valued between $5 and $20 with purchases of between $25 and more than $100.
To receive their gift certificate, customers can pick up a brochure with mail-in form at any Rite Aid or go to Riteaid.com and submit the information from qualifying receipts dated Nov. 16 through Dec. 24. All submissions must be received by Jan. 26, 2009, the company stated.
Rite Aid noted in its release that other ways consumers can save include the free Rite Aid RX Savings Card, the Living More senior loyalty program with discounts for those aged 55 and up and everyday savings with Rite Aid brand products which cost up to 40 percent less than national brands.
Rite Aid also honors the GNC Gold Card in those stores featuring the GNC “Live Well” stores, now in more than 1,700 Rite Aid stores. Gold Card members receive 20 percent off GNC products during the first seven days of every month. The drug store retailer is offering $5 coupon for Gold Card membership on its Web site, www.riteaid.com/stores/gnc/, through Dec. 31.