Target posts single-digit Q1 loss
MINNEAPOLIS Target has released the financial results of its first quarter 2008, which showed that profits decreased by 8 percent, according to the Associated Press.
The company reported a profit of $602 million for the three months that ended on May 3, down from $651 million during the same period last year. Revenue though did rise by 5 percent to $14.8 billion.
In response to this, Target is now trying to emphasize the “pay less” part of its “Expect More, Pay Less” slogan. The company is focusing on reaching out to consumers through its advertising to make them aware of sale prices as well as sale items located at the end of its stores aisles.
According to Target president and chief executive Gregg Steinhafel, “We’re just very mindful that the consumer is very cash-strapped right now and is looking for good values. They’re looking for more sale merchandise, and we are responding.”
In terms of the rest of the year financially for the company, chief financial officer Doug Scovanner said, “Our topline growth will likely remain sluggish until we see some stability or improvement in the economic environment.”
Target though is continuing with its plans to open 90 to 100 new stores this year, according to Steinhafel.
FDA asking for $225 million to boost import drug safety
WASHINGTON —Federal health officials have stated that the government needs $225 million more in funding to protect Americans from unsafe drug imports.
“We currently have a crisis and an opportunity to make real change,” Deborah Autor, director of the Food and Drug Administration’s drug compliance office, said at a House oversight subcommittee hearing.
Autor joined Dr. Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, in asking Congress to give the agency the power to inspect foreign companies that ship drugs to the United States, stop imports at the border if they come from factories not yet inspected and require American drug makers to monitor their overseas suppliers.
Woodcock said the FDA would need the $225 million in additional funding to inspect the 3,200 foreign drug-making plants, as frequently as it reviews plants in the United States. That is more than 20 times the agency’s current foreign drug inspection budget.
“We really do not inspect most of the facilities overseas very much at all,” Woodcock said.
After imports of pet food and toothpaste from China were found to be tainted, the Bush administration proposed basing inspectors overseas. The administration has refused to put a price tag on its plan; a plan that also puts more pressure on American companies and foreign governments to assure the safety of products made abroad.
Under the White House plan, the FDA would be given the power to mandate recalls of food. The Consumer Product Safety Commission would be able to levy higher fines, up to $10 million instead of $1.8 million, and it would be illegal to sell recalled products. FDA and CPSC officials would be posted overseas to work with exporters on standards and help train foreign inspectors.
“We need to do more to ensure that American families have confidence in what they find on our store shelves,” President Bush said. “They have the right to expect the food they eat, the medicines they take or the toys they buy for their children to be safe.”
FDA officials have been reluctant in previous import safety hearings to stray from ITS standard message, even under hostile questioning from House Democrats who are drafting legislation that would expand the agency’s powers and make foreign firms shipping drugs to the United States pay user fees to cover the cost of inspections. The fees could bring in $300 million a year.
The tough questioning continued at the subcommittee hearing as Reps. Bart Stupak, D-Mich., and House Energy and Commerce Committee chairman John Dingell, D-Mich., interrupted FDA officials to determine the limits on the agency’s authority to prevent unsafe imports from entering the United States and learn what reform legislation should contain.
Unhappy with the answers he was getting, Dingell told FDA officials that they should be embarrassed by their testimony and emphasized that the agency needed to become a tougher watchdog. “You folks are more trusting than a kindergarten class,” he said.
Dingell blasted FDA Commissioner Andrew von Eschenbach stating that he wasn’t doing his job and has not asked for enough money to inspect foreign drug manufacturers.
Dingell pointed his finger at von Eschenbach and repeatedly asked the FDA chief how much it would cost to conduct more inspections, objecting when von Eschenbach didn’t provide specific answers.
“You cannot do your job, you are not doing your job,” Dingell told von Eschenbach.
Von Eschenbach said the FDA is doing more overseas inspections than ever, although he agreed with law-makers that still more are needed. He added that more frequent inspections wouldn’t have detected the tainted heparin in China that has caused a global health scare.
The Government Accountability Office has estimated a significant gap in funding for overseas inspections. The GAO said it would take roughly $70 million annually for the FDA to inspect all of the more than 3,200 overseas drug manufacturing facilities every two years, $16 million to $17 million of which would be required for sites based in China. For fiscal 2008, the FDA estimated that it would spend $11 million for all foreign inspections.
Recent adverse events and deaths linked to contaminated heparin have brought the drug’s supply chain under tremendous scrutiny as regulators worldwide have instituted testing programs to ensure the supply of the drug is genuine. Woodcock believes that companies also need to be held accountable for the quality of their drugs and active pharmaceutical ingredients.
Woodcock said the FDA’s top priority was to institute an information technology system that includes an inventory of every establishment importing products into the United States.
Longs Drug advises shoppers through in-store OTC kiosks
WALNUT CREEK, Calif. —Longs Drug has launched new in-store kiosks that help shoppers find the best over-the-counter medication for their ailments. Longs rolled out the PharmAssist kiosks in 135 stores in April after testing them in a handful of stores for more than a year.
The interactive, touch-screen kiosks are located in the OTC aisle. They prompt consumers to answer questions about the health problems they need to treat and provide a list of medications that best address them.
“Our customers are faced with a wide variety of over-the-counter product choices,” said Larry Gatta, chief marketing officer for Longs. “They want an interactive solution that recommends and finds exactly what they need for their specific symptoms or health conditions quickly and easily.”
PharmAssist gives customers three options to start with—cold and flu, digestive and skin disorders—and then lists a series of sub-symptoms in each category. After all the variables are taken into account, the system produces a list of recommended products. PharmAssist also provides additional information about each product with the touch of a button, along with its exact location in the store. The system uses voice prompts to move the process along and offers Spanish language assistance.
While providing customers with the best diagnosis and recommendations is the main goal of the kiosks, they’re also designed to drive sales of specific products and brands, particularly a store’s private label and those of suppliers who may choose to advertise on the system.
“Advertisers and retailers are looking for more interactive ways to engage consumers that will help increase sales in an increasingly competitive market,” said Charles Koo, president of Evincii, a California-based software company that created PharmAssist. “What search has done for the world of Web-based commerce and advertising, Evincii is doing for the much larger world of in-store commerce.”
Koo said internal studies show advertisers highlighted on kiosks have increased sales by 7 percent to 18 percent, since they get prominent billing among the products recommended in each search. Private-label products are also listed at the top and tend to see increased sales.
And a fairly good percentage of shoppers are using the kiosks. Evincii said an average of 15 percent to 18 percent of OTC shoppers used the system at Longs stores during the pilot program. Koo said the company is in talks with other pharmacy retailers.