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Weis Markets posts record sales of $3.5 billion for 2017

BY Michael Johnsen

Weis Markets Tuesday afternoon recorded a 10.5% increase in annual 2017 sales to $3.5 billion.

“In 2017, we achieved record sales of $3.5 billion and generated our 15th consecutive quarter of increased comparable store sales. During this time, we also worked to efficiently integrate 44 newly acquired stores,” Jonathan Weis, Weis Markets chairman and CEO, said. “We have done much to position our company for future profitable sales growth.”

The company attributed its comparable annual sales increases of 1.5% in 2017 to continuing price investments, disciplined sales promotions and enhanced customer experience.

For the fourth quarter, the Sunbury, Pa.-based grocer posted sales increases of 2.2% while comparable store sales were up 1.2% when adjusted for the extra week in 2016. During the thirteen-week period ended Dec. 30, the company’s fourth quarter sales were $883.7 million compared to $925.1 million for the fourteen-week period ended on Dec. 31, 2016. The company’s net income increased 54.7% to $63.7 million while earnings per share totaled $2.37 primarily driven by a $49.3 million decrease in deferred income tax due to the U.S. Government enacting the Tax Cuts and Jobs Act.

Fourth quarter operating income was $22.3 million compared to $27 million for the same period in 2016. Approximately, $1.8 million of the difference was due to the additional week in 2016. The remainder of the difference in operating income was due to the company’s promotional programs and price investments; continued retail deflation combined with cost inflation and assimilation of 44 stores acquired in 2016.

 

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Walmart to expand grocery delivery service

BY Deena M. Amato-McCoy

Walmart is giving Amazon and its newest acquisition a run for its money in the online grocery delivery war.

Walmart is expanding its online grocery delivery service to 800 stores by the end of the year, a move that will serve more than 40% of U.S. households. The program, which is currently available in six markets, will grow to serve more than 100 metro areas across the country.

Customers can place orders online or through the Walmart Grocery app. Both options enable shoppers to purchase fresh produce, meat, seafood and bakery items, along with pantry staples, consumables and seasonal general merchandise. All items feature the same prices found in Walmart stores, Tom Ward, VP, digital operations, Walmart U.S., said in a blog on the company’s website.

Personal shoppers and crowd-sourced delivery services are used to shop for and deliver fresh groceries to customers’ doorsteps. More than 18,000 personal shoppers are involved in the program, and “thousands more” will be added this year, according to Walmart.

To participate in the program, associates must complete a three week training program that teaches them how to pick merchandise, including selecting the freshest produce, and the best cuts of meat. More than 800 Walmart stores will be used to fulfill orders, the discounter reported.

The Groceries Delivery service costs $9.95, and requires a $30 minimum order. Orders can also be delivered the same day.

The service is augmented by Walmart’s Online Grocery Pickup service that allows online customers to pick up orders at stores without ever getting out of their cars. The service is now available in 1,200 stores. Another 1,000 locations will be added this year, according to Walmart.

Walmart’s decision to expand its grocery delivery service takes a swing at Amazon as it expands its own grocery delivery service. The online giant announced last month that it launched free, two-hour deliveries of natural and organic products from Whole Foods through its Prime Now program in Atlanta and San Francisco. The service initially launched in January in Austin, Cincinnati, Dallas and Virginia Beach, with plans for continued expansion across the U.S. throughout 2018.

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Aetna acquisition clears CVS Health stockholder hurdle

BY David Salazar

CVS Health officially has its stockholder’s blessing for its Aetna acquisition. The Woonsocket, R.I.-based company had a special meeting Tuesday morning to secure stockholder approval for the $69 billion acquisition of the health insurer, at which more than 98% of shares voted to approve the deal. The company said it expects the deal to close in the second half of 2018, pending regulatory approval.

“When this merger is complete, the combined company will be well-positioned to reshape the consumer healthcare experience, putting people at the center of healthcare delivery to ensure they have access to high-quality, more affordable care where they are, when they need it,” CVS Health president and CEO Larry Merlo said.

The company said it is aiming to fill unmet healthcare need with the Aetna acquisition, touting its potential to bring patients more access to care in-store, in-home or through the use of connected health tools.

“The combination of CVS Health and Aetna brings together two complementary businesses with an expanded set of unique capabilities to create a new community-based open healthcare model that is easier to use and less expensive for consumers,” Merlo said. “We look forward to delivering more seamlessly coordinated care that ensures consumers have the essential resources to lead healthier lives for themselves and their families.”

As Aetna chairman and CEO Mark Bertolini put it in December when the acquisition was announced, the combination of the companies is designed to make CVS Pharmacy locations a “front door to the healthcare system” while using digital tools to ensure value for payers and patients.

Since the acquisition was announced — with speculation that the move also functions as a long-term play to out-maneuver Amazon as it looks to enter the healthcare space — other healthcare and retail players have followed suit. In a deal that will feature a similar marriage of pharmacy benefits management and health insurance capabilities, Cigna last week announced that it would be acquiring PBM ExpressScripts for $67 billion. And in the retail space, Boise, Idaho-based Albertsons is undertaking a $24 billion acquisition of Rite Aid, which is positioned make the combined company into the fourth-largest chain in terms of pharmacy sales. All this is taking place as Rite Aid continues to transfer stores to Walgreens Boots Alliance as part of its sale of 1,932 stores to the Deerfield, Ill.-based company that reportedly has been in acquisition talks with its longtime distribution partner AmerisourceBergen.

And retail pharmacy isn’t the only sector seeing consolidation to stay ahead of the curve, with specialty pharmacy Diplomat acquiring two PBMs in as many weeks last year to position it as a broader-based healthcare company.

Amid all of the industry shakeups, Merlo said the Aetna acquisition will position CVS Health well in relation to its competitors.

“At the same time, our company will benefit from a stronger market position, with the potential to deliver increased value through the development of innovative new products and services and generate long-term growth opportunities that help produce stronger, more consistent results for shareholders as a uniquely integrated healthcare company,” he said.

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