Thursday's results marked the fifth consecutive quarter in which Rite Aid increased its same-store sales. And at the rate it's currently going, there's a good chance the country's third-largest retail pharmacy chain soon could become profitable, even though it expected to post losses in 2013, albeit even smaller losses than in 2012.
Despite running fewer stores, Rite Aid grew its sales and narrowed its losses during the fourth quarter and fiscal year 2012, thanks to a boost in its loyalty card program membership, a longer fiscal year and the continuing dispute between Walgreens and Express Scripts.
During the question-and-answer session of Rite Aid’s third-quarter earnings call, president and CEO John Standley responded to a question about the Wellness+ loyalty card program by saying, “We continue to try and evolve and grow the program. We’re obviously learning a lot as we go.”
Rite Aid experienced stronger sales in third quarter 2012 as it expanded its Wellness+ loyalty card program and saw continued growth in flu immunizations and the Wellness store format, the company said Thursday.
During Rite Aid’s second-quarter 2012 earnings call last week, at least two analysts congratulated the company on its performance. It’s little wonder: As president and CEO John Standley said, the quarter saw the first increase in total sales in 13 quarters, with much of the improvement driven by the Wellness+ loyalty card program.
When Rite Aid chairman Mary Sammons accepted the Sheldon W. Fantle Lifetime Achievement Award at the National Association of Chain Drug Stores’ Annual Meeting in Scottsdale, Ariz., in May, it was the culmination of a career that had seen Rite Aid emerge from a period of darkness that had lasted more than a decade.
The 19th century British writer William Hickson may have written, “If at first you don’t succeed, try, try, try again,” but he only had half the story. By all means, try again, but don’t do the same thing over and over and expect different results.
Since its nationwide launch in April 2010, Rite Aid’s wellness+ loyalty card program rapidly has proven itself to be a phenomenal boost to the chain’s business as the first-ever loyalty program designed to enhance customers’ savings and well-being together.
Sales may have been flat overall, but a closer look revealed there was a lot to be positive about in Rite Aid’s fiscal first quarter 2012 earnings, as the company managed significant expense improvement and stronger same-store sales growth. Bottom line: Rite Aid narrowed its losses considerably, and that ain’t all expense control.
Rite Aid recently has put into play a number of forward-looking initiatives to help improve operations, particularly across pharmacy. The Pennsylvania-based retailer last month announced its test market of six new Wellness store prototypes, and after successfully testing a 15-minute prescription guarantee in three states, Rite Aid expanded that guarantee to all states except New York.
What Rite Aid might wish for Christmas is accelerated results borne from its Wellness+ loyalty card program, because even as the chain lowered its guidance for fiscal 2011 sales, it’s that differentiated loyalty program that executives believe is going to buttress sales next year and beyond.