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Sales rise in June for Walgreens

BY Allison Cerra

DEERFIELD, Ill. Sales at one of the nation’s largest drug store chains increased 8.4% for the month of June.

Walgreens disclosed its earnings for the month on Tuesday, stating that its $5.67 billion June sales were aided by Duane Reade stores, which contributed 3 percentage points to the total sales increase.

Sales in comparable stores (those open at least a year) increased 2%. Duane Reade stores, however, are not included in any comparable store results.

Meanwhile, June pharmacy sales also saw a positive gain of 6.8%, while comparable pharmacy sales increased 1.8%.  The effect of calendar day shifts positively impacted comparable pharmacy sales by 0.2 percentage points. Comparable-pharmacy sales were negatively impacted by 1.9 percentage points due to generic drug introductions in the last 12 months and by 0.3 percentage point due to lower incidence of flu. Pharmacy sales accounted for 65.6% of total sales for the month.

Total front-end sales increased 10.9% in June, including 5.1 percentage points from Duane Reade. Comparable-store front-end sales increased 2.2%. Customer traffic in comparable stores increased 2%, while basket size increased 0.2%.

At June 30, Walgreens operated 8,038 locations in all 50 states, the District of Columbia, Puerto Rico and Guam. That includes 7,541 drug stores, 639 more than a year ago, including 283 stores acquired over the last 12 months.

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Coupons.com apps reach 1 million download mark

BY Allison Cerra

MOUNTAIN VIEW, Calif. Coupons.com’s mobile applications for digital coupons have been downloaded more than 1 million times, including more than 300,000 downloads in the last 45 days.

The Grocery iQ and Coupons.com applications were designed for iPhone and Android phones. Grocery iQ is designed to create and manage grocery lists, while the Coupons.com app allows users to access, browse and select offers from Coupons.com, including coupons they can print for redemption, Save to Card coupons that load directly to their store loyalty cards and hyper-local Show & Save coupons they show on their mobile devices for redemption at point of sale.

“Our goal is to give consumers the money-saving offers they want — at the right place, at the right time. Our Coupons.com digital coupon platform uniquely allows us to engage consumers with relevant offers all along the path to purchase, from the moment they identify purchase need to actual purchase, including list building and in-store browsing, comparison and selection,” said Steven Boal, CEO of Coupons.com.

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Swipe fee reform: Just what the industry ordered

BY Michael Johnsen

WHAT IT MEANS AND WHY IT’S IMPORTANT This represents a significant victory for retailers from all sectors, if for nothing else than it provides a little overhead cost stability in what continues to be a volatile economy.

(THE NEWS: Swipe fee fix draws praise from industry groups. For the full story, click here)

These swipe fees not only represent the fastest-growing expense to retail, but retailers also are held somewhat hostage to swipe fee increases — large banks can raise the rates at their discretion without any input from retailers beyond a retailer’s refusal to accept that particular form of payment. And with the proliferation of credit cards and debit cards among today’s consumers, refusal to carry doesn’t really represent a viable option.

According to the 2010 Debit Issuer Study, commissioned by PULSE (a Discover Financial Services company and leading ATM/debit network), the debit card market has remained robust during the second year of the economic downturn, and is projected to grow strongly in 2010. And the study determined that much of the growth in debit use is in small-ticket transactions, suggesting that more consumers prefer debit over cash.

Debit card penetration — the percentage of eligible accounts that can be accessed by a debit card — has remained steady at 73% since 2007, and as many as 64% of consumer debit cards are active. Banks surveyed experienced overall debit transaction growth of 10% between 2008 and 2009. In 2009, 58% of all debit transactions were less than $20.

"The debit market has continued to weather the economic storm as a result of consumer preference for debit and increasing merchant acceptance of small-ticket debit transactions," stated Cindy Ballard, PULSE EVP. "As consumers scaled back spending during the recession, they embraced a pay-as-you-go approach and are keeping their debit card top-of-wallet."

The Dodd-Frank Wall Street Reform and Consumer Protection Act also may prove timely for retailers. According to the aforementioned PULSE report, pending government regulations were cited by issuers as a “major challenge” for their institutions, particularly changes to Regulation E that take effect this summer. That regulation change requires bank customers to “opt-in” to allow ATM and small debit transactions to overdraw their accounts, and in so doing incur an overdraft charge.

Between interchange fees and overdraft charges, PULSE estimated each active card generates $118 in annual revenue industry-wide. And issuers expect as many as 70% of consumers to not opt in. “Financial institutions expect that the changes to Reg E will result in fewer approved transactions, lower interchange [fee] income and less profitable debit card programs, impacting debit card profitability over the next two years. In an effort to counteract potential decreased fee income, 45% of issuers have already created a plan in response to the changes,” PULSE noted in a June 14 release. And what are the chances those plans include increasing interchange fees in an effort to counterbalance declining overdraft fees?

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