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Wal-Mart exceeds December comp guidance

BY Mike Troy

BENTONVILLE, Ark. Wal-Mart citied strength in its pharmacy business, along with grocery and electronics as key drivers of a 2.6 percent increase in December same store sales.

That figure was at the upper end of company guidance of 1 percent to 3 percent increase, and exceeded analysts’ estimates of 1.8 percent.

Total sales for the Wal-Mart’s U.S. stores division increased 5.6 percent to $29.7 billion during the five-week December reporting period ended January 4. Although pharmacy was mentioned as an import component of the increase, further explanation about the results focused on food, seasonal categories and operational improvements.

“Wal-Mart’s food performance was very strong, which helped drive traffic to other areas of the stores,” said Eduardo Castro-Wright, president and ceo of Wal-Mart Stores U.S. “Our price leadership position was clear very early in the holiday season and customers responded throughout the period to our pricing and merchandise offerings which were support by well-integrated advertising and in-store communication.”

Faster, friendlier checkouts and an overall improvement to the in-store experience also contributed to the results, according to Castro-Wright.

Although he didn’t mention the company’s $4 generic drug program which now includes 360 products, the initiative was heralded throughout the year and used by Wal-Mart in customer communications to drive the perception of price leadership. The program was also an element of the well-integrated advertising and in-store communications referenced by Castro-Wright.

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Walgreens, DHL team up to offer shipping at store kiosks

BY Drew Buono

DEERFIELD, Ill. Walgreens has entered into an agreement with DHL to offer shipping services in almost all of its stores. The program will begin in April in Illinois and Florida and is expected to expand to more than 6,500 locations by the end of the calendar year 2008.

DHL shipping spot kiosks will be available at Walgreens photo counters and will be staffed by Walgreens employees, who will weigh, label and ship customer packages to U.S. or international destinations. Each location will offer packaging materials, in addition to complimentary DHL Express shipping envelopes and boxes. Walgreens customers will have access to all of DHL’s core services, including overnight, ground and international delivery.

“We’ve seen strong customer response to DHL in-store shipping in test markets,” said Walgreens executive vice president of marketing George Riedl. “The service addresses an important need for our time-crunched customer base. This new offering will be another powerful addition to our overall strategy of making life easier for customers.”

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Supervalu reports earnings increase despite sales drop

BY Michael Johnsen

MINNEAPOLIS Supervalu on Wednesday reported a third-quarter drop of 4.7 percent in net sales of $10.2 billion, but record net earnings of $141 million show an increase of 25 percent compared to the year-ago period.

“Our third-quarter results continue to benefit from the transformational acquisition in 2006 as we deliver the sixth straight quarter of double-digit earnings per share growth,” stated Jeff Noddle, Supervalu chairman and chief executive officer. We are pleased with our overall results, despite some headwind from softer than expected retail sales in the quarter.”

Supervalu’s third quarter of fiscal 2008 ended Dec. 1, 2007, and included 12 weeks of combined results compared to the third quarter of fiscal 2007 which included 13 weeks of acquired operations. The estimated sales impact of one less week of acquired operations in the third quarter of fiscal 2008 is approximately $500 million.

In addition, third-quarter fiscal 2008 and third-quarter fiscal 2007 results included after-tax charges for one-time acquisition-related costs of $7 million and $10 million, respectively. When adjusting for the one-time acquisition costs in both years and the one extra week in the prior year quarter, diluted earnings per share increased 23 percent, the company stated.

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