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Pharmacy is the star of new Target ad effort

BY Mike Troy

MINNEAPOLIS —Talk about pressure. Pharmacy is playing an unfamiliar role in Target’s holiday plans this year, as the retailer is soon expected to begin airing its first ever national advertising campaign to promote pharmacy.

A launch date for the television campaign hasn’t been disclosed, and it seems a little surprising that, prior to now, Target never promoted pharmacy on a national level. And that’s exactly the point the retailer’s EVP merchandising, Kathy Tesija, made during the company’s second-quarter conference call. The TV spots, Tesija said, are part of “an unprecedented integrated marketing campaign to drive even greater awareness for our pharmacy services and convert more Target guests into Target pharmacy guests.”

Target is a major pharmacy retailer, operating more than 1,500 pharmacies in its 1,719 stores nationwide. “These efforts will help contribute to storewide sales growth, as loyal pharmacy guests are some of our best guests in terms of frequency and basket size,” Tesija said.

The challenge for Target is to promote greater awareness of its pharmacy offering and convince a higher percentage of customers who are already shopping its stores for other merchandise to begin having their prescriptions filled there, too. If the ad campaign is successful in generating increased usage among existing customers, in addition to attracting new ones, the anticipated boost in customer traffic and average transaction sizes couldn’t come at a better time.

The company has seen its customer counts and average transaction sizes dwindle this year as shoppers migrated to other retailers they perceived to offer better values, while those who stayed true to Target curtailed their purchases of margin-friendly apparel and home goods. The result was flat or declining same-store sales that have been common at Target for the past 18 months, and to counter the trend, the company has aggressively promoted traffic-generating categories—such as food and consumables, and now pharmacy—while making bold new statements about its low prices in ads and in store.

Such measures are slow to affect the bottom line, though, as Target is essentially attempting to partially unwind consumers’ perception of its pricing, while retaining favorable attributes related to trend-right merchandise presented in well-maintained stores and a pleasant shopping environment.

An effective pharmacy campaign could be an important factor in stopping or reversing Target’s declining sales trends. Sales decreased 2.7% in the second quarter to $14.6 billion from $15 billion, but same-store sales declined 6.2%. Extensive cost cutting enabled Target to produce earnings per share of 79 cents, surpassing analysts’ estimates of 66 cents, but net income of $594 million was still well below the prior year’s $634 million.

“Second-quarter earnings were stronger than expected owing to very strong operating margin in our retail segment and credit card segment performance in line with expectations,” said Gregg Steinhafel, chairman, president and CEO. “Looking forward to the second half of the year, we are focused on initiatives to drive incremental traffic and sales in our stores.” Pharmacy is such an initiative.

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Stop & Shop to offer flu shots to customers

BY Allison Cerra

QUINCY, Mass. For more than twenty years, Stop & Shop has provided seasonal flu shots as part of its Health & Wellness initiative in a continuing effort to best meet the needs of its customersduring the cough and cold season. This year, Stop & Shop will offer seasonal influenza immunizations at a reduced price to Stop & Shop card holders in the pharmacy department beginning Sept. 11 through Nov. 26 or until quantities associated with this program last.

“As part of our continued commitment to provide value to our customers, Stop & Shop is offering seasonal flu shots for $20 when customers use their Stop & Shop card,” said Jim Wonderly, VP pharmacy operations for Stop & Shop. “Unfortunately, many Americans are foregoing medical care because of increased costs, and we want to do our part by offering affordable immunizations during these challenging economic times.”

Seasonal flu shots will be administered at a reduced price in most Stop & Shop stores starting Friday, expanding to all stores in October. Immunizations will be provided by certified and trained Stop & Shop pharmacists and through Stop & Shop’s partnership with Maxim Health Systems and their trained health care professionals. The cost of the seasonal immunization is $30, but customers with a Stop & Shop loyalty card can save an additional $10. Thus, the final cost to Stop & Shop customers, with the Card, is $20.

“Last month, we introduced millions of customers to the new Stop & Shop card along with a commitment to provide them with the best possible value,” said Stop & Shop EVP Jeff Martin. “With the savings Stop & Shop is offering on seasonal flu shots, we are demonstrating that ongoing value commitment as well as a commitment to the health and wellness of ourcustomers.”

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Louisiana seeks to curb methamphetamine abuse with new legislation

BY Michael Johnsen

ALEXANDRIA, Va. Two government officials from Louisiana invited the National Association of Chain Drug Stores for a signing of a new law aimed at curbing methamphetamine abuse.

On Sept. 8, Gov. Bobby Jindal and Rep. Fred Mills invited NACDS, law enforcement and other select stakeholders to the Governor’s Mansion for a special signing ceremony for HB890 (Act 314). NACDS was instrumental in the negotiations and eventual passage of the new law which establishes a real-time pseudoephedrine reporting system once federal grants are secured.

The law also provides liability protections to pharmacy, and specifically states that no fees will be collected from pharmacies or pharmacists to operate or transmit the data to state police.

NACDS thanked both Gov. Jindal and Rep. Mills for initiating this important legislation, and for working with pharmacies to make it even better.

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