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Rite Aid reports monthly financial results

BY Michael Johnsen

CAMP HILL, Pa. Rite Aid Corporation on Thursday posted a 1.8% same-store sales increase for the four weeks ended April 25. April front-end same-store sales increased 3.2%, while pharmacy same-store sales, which included an approximate 453 basis points negative impact from new generic introductions, increased 1.2%.

April and March front-end sales were impacted by a later Easter this year (April 12 this year versus March 23 last year). Same-store front-end sales for the combined March and April sales period decreased 1.6%.

For the period, same-store sales excluding the acquired Brooks Eckerd stores increased 2.7% and pharmacy same-store sales increased 2.6%.

The acquired Brooks Eckerd stores were flat, compared with the prior-year period, with front-end same-store sales increasing 4.4% and pharmacy same-store sales decreasing 1.4%.

Total drug store sales for the four-week period were flat with sales of $2 billion. Prescription revenue accounted for 67.8% of drug store sales, and third party prescription revenue represented 96.3% of pharmacy sales.

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DVD, Blu-ray goes to the ‘Dogs’

BY Allison Cerra

LOS ANGELES, Calif. Paramount Home Entertainment has announced the DVD and Blu-ray release of its newest furry comedy.

Family comedy Hotel for Dogs finds a new home on April 28.

Starring Emma Roberts (Nancy Drew), Jake T. Austin (“Wizards of Waverly Place”), Don Cheadle (Ocean’s 11), Lisa Kudrow (“Friends”) and Kevin Dillon (“Entourage”), the exciting and inspiring animal adventure shows just how far friendship and imagination can take you.

When two orphans find themselves in a foster home with a strict “no pets” policy, they set out to find a home for their canine companion and end up creating a haven for all the strays in the city. Filled with loveable dogs and ingenious kids, Hotel for Dogs has the kind of pedigree that the whole family can enjoy.

Loaded with over 45 minutes of special features, the Hotel for Dogs DVD and Blu-ray presentations include the making of the film, behind-the-scenes featurettes, deleted scenes, photo galleries and more, as well as commentary from director Thor Freudenthal, producer Ewan “Jack” Leslie and cast members Emma Roberts and Jake T. Austin.

The DVD format of the film has a suggested retail price of $29.99, while the Blu-ray format has a suggested retail price of $39.99.

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Walgreens moves ahead with store redesign

BY Jim Frederick

NEW YORK Making good on its promise to overhaul and rejuvenate its store format and merchandise presentation, Walgreens shed new light on its store renovation program Tuesday.

That program will see its first large-scale test in the coming weeks, Walgreens’ top financial officer told investment analysts, with the unveiling of some 35 new or redesigned drug stores by early summer. By this fall, some 400 of the company’s more than 6,700 drug stores will sport the new, slimmed-down prototype, SVP and CFO Wade Miquelon told analysts at the Barclays Capital Retail and Restaurants Conference April 28.

The new format features a pared-back product selection — with SKUs down by 15 to 20%, according to Miquelon — and gondola heights lowered to improve department visibility and sightlines. Walgreens is scrapping many slow-moving and redundant product facings and offering more of what the company is calling “affordable essentials” like detergent, mouthwash, skin care products, shampoo and batteries.

The company is also emphasizing more promotional items in both its product selection and advertising, and grouping those products thematically to make it easier for the 5.3 million customers who shop its stores each day to find what they’re looking for.

The goal, said company leaders, is to create an easier and more exciting shopping experience for customers and boost average shopping baskets by at least one more item per customer. The result could be billions of dollars in additional revenues, more productive and profitable stores and additional customer visits as the company works to restore its sales and profit momentum in a recessionary economy.

One Wall Street analyst who has toured the new Walgreens experimental format, Mark Miller of William Blair & Co. Equity Research, called the early result “a good first effort,” adding, “management has improved the aesthetics in its new store format by reducing the SKU count…and keeping the merchandise presentation below its standard five-ft., six-inch risers.

“In addition to streamlining the assortment — which management hopes can reach a 30% reduction over time — the company has strengthened the product lineup in key healthcare and beauty categories,” added Miller. “Additionally, the new store format has an expanded selection of convenience food and staple items, which may help drive stronger traffic to the store.”

In a recent interview with Drug Store News, Walgreens president and CEO Greg Wasson said the company’s aim with its new store format is to “reinvent the front-end experience” by taking a microscope to “every category in the store.”

“It’s everything from reviewing our merchandise selection and our department adjacencies, our profile, our look and feel and so forth within the stores,” Wasson explained, “and also taking a good, hard look at our costs and our efficiencies and our processes, as to how we do business. I think the fortunate thing about the industry we’re in is that we sell a lot of what people need. So we’re focusing on all we can do to meet the new consumer needs and make sure we’re relevant in their everyday life, by offering high value…products and services.”

Walgreens merchandisers and category managers are going through every department within the store, and have “spent the last seven or eight months really understanding what does the shopper want,” said Miquelon.

According to a report from Dow Jones Newswires, Walgreens is reporting that the section-by-section overhaul of the company’s prototype front end is 80 to 90% competed.

“Hopefully, by mid-summer we’ll be well on the way,” Wasson predicted earlier this year.

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