Fred's reports 'solid' December pharmacy sales

MEMPHIS, Tenn. — Regional discounter Fred’s strong pharmacy sales weren’t enough to help the company avert a 1.4 percent same-store sales decline for the month.

 

The operator of 661 stores said total sales for the December period ended Jan. 3 increased 1 percent to $210.7 million. On a year to date basis, sales increased 1 percent to $1.83 billion and same-store sales declined 1 percent.

 

"December sales in our pharmacy department continued to do well, with a solid performance in terms of script and sales growth. Specialty pharmacy sales also continued to grow and reached record levels in December,” Fred’s CEO Jerry Shore said, without elaborating on the magnitude of the increase.

 

“However, we did not meet our general merchandising marketing plan, which resulted in lower traffic and comparable sales for December,” Shore added. “The marketing initiatives for general merchandising that we put in place last summer delivered good results during the first five months after implementation, however, as we ran into our competitors' very aggressive marketing programs at the end of the third quarter and into the fourth quarter, traffic suffered.”

 

Lead times on advertising circulars meant the company was unable to effectively adjust to the competitive environment, according to Shore. Looking ahead to holiday 2015, Shore said the company will be better able to refine merchandise and marketing programs following the recent appointment of a general merchandise manager and the expected naming of a new president and COO within a few weeks.

 

"Management's efforts have been concentrated on driving traffic in 2015 and restoring profitability," Shore said. “The team has installed multiple process improvements and buying disciplines, which along with our efforts to strengthen key management roles, will help ensure that we successfully execute our strategic and operating plans in 2015.”