Walgreens implements Chicago Hometown Investment Initiative
DEERFIELD, Ill. — Walgreens on Wednesday unveiled plans to establish deeper roots on its home turf with its “Chicago Hometown Investment Initiative,” a plan that will create an estimated 600 new jobs in the city over the next two years and will quadruple the number of Walgreens’ food oasis stores.
About half of those 300 jobs will fuel an expansion of Walgreens’ digital strategy, the company stated. The remaining jobs will be created by new store openings and remodeling of many of Walgreens’ 142 Chicago drug stores, including the planned expansion of Walgreens’ 11 food oasis stores in the city to nearly 50 over the next two years.
“Our expanded investment in Walgreens’ hometown demonstrates the optimism we’ve had for Chicago since Charles R. Walgreen Sr. opened his first store here in 1901 at the corner of Cottage Grove and Bowen avenues,” Walgreens president and CEO Greg Wasson said. “By bringing more jobs to the city, expanding commerce and providing healthy living choices to residents across the city, we strive to make Chicago an even better place in which to live well.”
Added Chicago mayor Rahm Emanuel, “This dual investment by Walgreens will have a profound effect on the city of Chicago. The 600 new jobs will have a strong impact on our economy, and the nearly 40 new food oasis stores will allow many of our residents to get healthy food for their families. This is an example of a corporation that is committed to both the city of Chicago and its mission.”
Walgreens’ Chicago Hometown Investment Initiative includes three components:
Expanded downtown office space: Walgreens plans to expand its downtown presence for e-commerce, information technology and other support areas, some of which have been located in the Sullivan Center since March 2010. The expansion comes shortly after Walgreens completed on June 3 its acquisition of Drugstore.com, a strong online business across the health, personal care, beauty and vision categories that better positions Walgreens as the most convenient multichannel retailer of health and daily living in America;
Expansion of food oasis stores: Walgreens intends to quadruple the number of Chicago stores in which it provides expanded healthy food selections to serve communities identified as food deserts, or areas that lack access to basic foods necessary to maintain a healthy diet. In August 2010, Walgreens celebrated the opening of 10 redesigned stores on Chicago’s South and West Sides to include more than 750 new food items, including fresh fruits and vegetables, frozen meats and fish, pasta, rice, beans, eggs, whole-grain cereals and other healthy meal components. Earlier this month, Walgreens was 1-of-4 companies to participate in a special CEO summit with mayor Emanuel to address the food desert crisis facing Chicago’s inner city neighborhoods. The company now plans to double the number of stores with expanded healthy food selections by 2012, and double the number again in 2013, to reach a total of nearly 50 food oasis stores; and
New and remodeled drug stores: Walgreens plans to open at least five additional stores in Chicago over the next two years, while also investing in remodeling many of its existing stores in the city. The new and remodeled stores, combined with expansion of Walgreens’ food oasis locations, are expected to add approximately 300 new jobs in the city.
Walmart helps customers save at the pump
BENTONVILLE, Ark. — Walmart announced that it will offer customers savings of 10 cents a gallon on all fuel, gas and diesel at participating Murphy USA and Walmart gas stations. The reduction is part of a 90-day Rollback program.
The program will be implemented across 18 states.
"Our customers have told us that high gas prices are a top budget concern, nearly as large an expense to their households as food and groceries," Walmart chief marketing officer Stephen Quinn said. "We listen to our customers, and because we know they are feeling squeezed by gas prices, we’re implementing this gas rollback to help them save, especially during high travel summer months."
Inventories swell as Family Dollar boosts beauty
MATTHEWS, N.C. — A 25% increase in the health and beauty care product assortments at Family Dollar contributed to overall inventory growth during the company’s third quarter, the retailer announced Wednesday morning with the release of its financial results.
In addition to the major expansion of the health and beauty category at 5,000 of the company’s 6,900 stores, Family Dollar said it also expanded assortments of food by 20%, which, combined with the health and beauty care initiative, resulted in an overall increase in inventory levels of 15%.
The inventory growth in high purchase frequency categories had the desired effect of increasing customer traffic, based on results for the company’s third quarter ended May 28. Increased customer traffic during the period, along with larger transaction sizes, was credited with driving a third-quarter comps increase of 4.7%, which came on top of a prior-year gain of 7%.
While a 4.7% increase driven by strength in consumables is a respectable showing, it was short of the company’s guidance, which called for an increase in the range of 5% to 7%. That caused earnings per share, which increased 18.2% to 91 cents, to fall 4 cents shy of analysts’ consensus estimate of 95 cents.
“We accomplished much this quarter to position us to capture greater market share and execute our longer-term vision for Family Dollar,” Family Dollar chairman and CEO Howard Levine said. “I remain confident that our strategy of providing customers with value and convenience, combined with the impactful investments we are making to improve the shopping experience in our stores and our profitability, will continue to deliver strong shareholder returns.”
Those returns were pressured during the quarter as gross margins declined to 36.2% from 36.6% the prior year due to strong sales of lower margin consumables, increased promotional markdowns and higher transportation costs. The company said those pressures were offset partially by investments in price management capabilities, private brands, global sourcing and lower inventory shrinkage.
The company continued to expand its store base during the first three quarters of its fiscal year with the opening of 206 new stores and closing of 48 stores. That compared with the prior year when 125 stores were opened and 56 stores closed. During the third quarter of this year, there were 367 store renovations giving the company a total of 680 on the year.
More renovations are planned during the fourth quarter, bringing the total figure to 900. Additional store openings also will occur, bringing the total number of new units to 300. The company operated roughly 6,900 stores in 44 states at the end of the quarter.
Looking ahead, fourth-quarter earnings per share are forecast to fall in a range of 62 cents to 70 cents, compared with 56 cents last year while full-year profitability is forecast in a range of $3.08 to $3.16, compared with $2.62 last year.