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NRF: Shutdown deal just postpones issues

BY Dan Berthiaume

WASHINGTON, D.C. — Matthew Shay, president and CEO of the National Retail Federation, released a statement on the decision to reopen the federal government through Jan. 15 and raise the debt ceiling until Feb. 7. Shay said that while the agreement provides some satisfaction, it essentially continues debate and postpones difficult economic decisions that must be made.

“As we head into the holiday shopping season, retailers and consumers need stability and certainty from policy-makers in Washington and assurance that the economy will not implode due to their actions or more important, lack thereof,” said Shay. “This new norm of legislating from crisis to crisis is no way to govern.”

Shay also said that the economic recovery is retail-led and consumer-driven, and that cuts in consumer spending hurt retailers as well as the economy as a whole and U.S. taxpayers.

“Today’s decision will provide some breathing room for legislators to negotiate and compromise, but it is not a solution to our long-term economic or fiscal challenges,” concluded Shay.

 

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Bloomberg: CEO of Brazil’s Pague Menos open to CVS, Walgreens deals

BY Antoinette Alexander

SAO PAULO, Brazil — Competition and consolidation within the Brazilian market has heated up in recent years, prompting Empreendimentos Pague Menos SA, Brazil’s second-biggest drug store company, to step up its growth strategy and eye potential mergers and acquisitions. When asked about future expansion plans during a recent interview with Bloomberg, CEO Francisco Deusmar de Queiros said he would consider such U.S. partners as CVS Caremark and Walgreens.

“We’ve been approached by some companies, but we would only do it with a strategic partner,” Queiros reportedly told Bloomberg during an interview at Bloomberg’s Sao Paulo office without naming any prospects. “The right partner has yet to appear -— the right partner that enchants us to go to the ball and dance.”

Queiros reportedly told Bloomberg that Pague Menos’s need for funding to expand would sway him to consider potential tie-ups with U.S. companies.

In emailed responses sent to Bloomberg, neither CVS Caremark nor Walgreens commented on the speculation.

“We continue to see Brazil as a very attractive market for us, but as a matter of policy we do not comment on market rumors,” Carolyn Castel, CVS’ VP of corporate communications, told Bloomberg via e-mail.

Walgreen is “positioned for international expansion” with partnerships outside the United States. and otherwise has no specific plans now, Michael Polzin, Walgreens spokesman told Bloomberg in an e-mail response to questions.

As previously reported by Drug Store News, CVS Caremark earlier this year spread its wings beyond the U.S. borders in a measured fashion with the acquisition of privately held Brazilian drug store chain Onofre. At the time, Onofre operated 44 stores and was the eighth largest drug store chain in Brazil.

Brazil is an attractive market where health care and pharmacy are expected to grow double-digits for the next decade. From 1996 to 2012, pharma sales in Brazil have grown at an approximately 12.5% CAGR; focusing on the period from 2008 to 2012, this rate accelerates to approximately 13.5%. Pharmaceutical sales for the period 2008 to 2012 have a growth rate of: Medicine sales up 13.5%; generics up 25%; and branded products up 11.1%, noted Citi Research analyst Deborah Weinswig in a research note earlier this year.

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Kroger will name Michael Ellis president, COO in January

BY Michael Johnsen

CINCINNATI — Kroger on Thursday announced that Michael Ellis will be named president and COO, effective Jan. 1, 2014, completing the succession plan announced in September. The company expects its board of directors to elect and name Ellis to those titles at the next board meeting in December.

In September, Kroger announced its board of directors’ long-term CEO succession plan. David Dillon, 62, Kroger’s chairman and CEO, will retire as CEO on Jan. 1, 2014, and will continue to serve as chairman through Dec. 31, 2014. Rodney McMullen, 53, Kroger’s president and COO, will become CEO on Jan. 1.

"Mike’s broad-based experience on both the food and general merchandise sides of our business make him a great fit for this role," Dillon said. "Mike is a team builder who will be a great partner with our entire leadership team. We look forward to his dynamic leadership of Kroger’s diverse operations."

"Mike has been a key player in our strategic efforts for many years, including the expansion of Fred Meyer’s general merchandising expertise throughout the company and, more recently, our accelerated growth plan," McMullen added. "His extensive knowledge spans our multiple formats and unique approaches to merchandising. Mike’s insistence on operational excellence and his willingness to push boundaries to improve the customer experience will ensure Kroger continues to grow and deliver shareholder value. Above all else, Mike brings a contagious enthusiasm for our associates and putting the customer first."

Ellis, 55, has been serving in his current role as SVP retail divisions since 2012, where he leads five retail supermarket divisions, plus Kroger’s jewelry and convenience store businesses. He previously served as president of Portland-based Fred Meyer —the company’s largest operating division by revenue — for six years.

Ellis is a 38-year Kroger veteran. He joined Fred Meyer in 1975 as a parcel clerk at age 16, and went on to serve in a series of operations and merchandising leadership positions in stores, division management and as a corporate officer. He was VP of Fred Meyer’s food group before joining Kroger as a senior officer in 2004. He returned to lead Fred Meyer as president in 2006, where he significantly improved and sustained associate engagement. Ellis played an influential role in the growth of the company’s successful Marketplace store format, which offers a wide assortment of general merchandise including home goods, toys and apparel in addition to full-service grocery and pharmacy departments.

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