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Dismal economy stalks November sales as Walgreens closes out a bleak month


DEERFIELD, Ill. In a sure sign of the downward economic spiral plaguing the nation’s retailers, Walgreen Co. reported a nearly one-percent decline in same-store sales for the month of November.

Overall sales edged up 3.7 percent for the month over the same period last year, to $4.96 billion. But sales in stores open more than a year fell 0.9 percent. Comparable-store front-end and pharmacy sales also slid 0.9 percent, Walgreens announced today.

Black Friday and the following weekend saw stronger consumer traffic than a year ago, according to the company, but fewer items were purchased per transaction. Transactions in comparable stores rose 1.7 percent in November.

Pharmacy sales for the month were up an anemic 2.4 percent on a total-store basis, pulled down both by sagging consumer activity and by the increasing use of lower-priced generic drugs over their brand-name counterparts. Comp-store pharmacy sales, according to Walgreens, “were negatively impacted by 2.3 percentage points due to generic drug introductions in the last 12 months.”

The company also blamed a shift in the calendar for the comp-store decline in pharmacy business, “as pharmacy patients fill more prescriptions during the week than on weekends.

“This year, November had two fewer weekdays compared to November 2007,” Walgreens reported. “Calendar shifts, along with one less holiday shopping week in November this year, negatively impacted total comparable store sales by 2.5 percentage points, front-end sales by 0.8 percentage points, comparable pharmacy sales by 3.4 percentage points and prescriptions filled in comparable stores by 3.3 percentage points.”

The bad news extended to total prescriptions filled, which decreased 3.4 percent on a comp-store basis in November over the same period last year. The shift of Zyrtec from prescription to over-the-counter status was another factor in that decline.

Pharmacy sales accounted for 64.4 percent of total sales for the month, according to the chain.

Walgreens said strong sales of basic necessities, consumables and key beauty items gave some lift to front-end revenues, as did Zyrtec's switch to OTC status.

“Consumers continued to shop our stores for the essentials throughout the holiday weekend,” explained Walgreens president and chief operating officer Greg Wasson. In a hopeful note, he added, “As we approach the last-minute Christmas rush, shoppers will take even greater advantage of our wide selection of products and convenient locations.”

Walgreens opened 94 stores in November, including 15 relocations, and acquired eight stores. As of Nov. 30, the chain operated 7,123 locations in 49 states, the District of Columbia, Puerto Rico and Guam. That includes 6,630 drug stores—an increase of 491 stores over a year ago—as well as worksite health centers, home care facilities and specialty, institutional and mail service pharmacies.

The company’s Take Care Health Systems subsidiary manages 293 walk-in clinics at Walgreens drug stores. That figure doesn’t include franchisees of Option Care, Inc., a wholly owned Walgreens subsidiary.

On Monday, Walgreens also announced it had completed its purchase of McKesson Corp.’s specialty pharmacy operations, adding to its fast-growing specialty division.

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