Downturn flattens Walgreens January sales

2/3/2009

DEERFIELD PARK, Ill. In a clear sign that even the best-run retail pharmacy operators have been staggered by a brutal economic retreat, Walgreen Co. reported an anemic sales performance in January as the continuing falloff in consumer spending flattened sales at both the pharmacy and front end.

Sales in comparable stores – those open more than a year – rose just 0.4 percent in January vs. the same period last year. Comp-store pharmacy sales were up 1.0 percent over prior-year levels, while comp-store at the front of the store actually declined 0.9 percent.

Overall, sales rose 5.3 percent over the year-earlier period, to $5.22 billion. Walgreens said calendar-day shifts also hurt comparisons in January 2009, which had one fewer weekday than the same month last year. Recent generic drug introductions, which Walgreens said took 2.2 percentage points off the comp-store pharmacy figure in January, also hurting topline comparisons.

A slide in the number of same-store prescriptions filled also reflected the dismal economy, with scripts dispensed down 2.0 percent in January. However, Walgreens attributed part of the decline to a shift by more customers to 90-day prescriptions vs. 30-day purchase patterns, which cut comp-store prescriptions dispensed by 1.6 percent.

“Comparable prescriptions filled also were hurt by 0.3 percentage points due to the switch of Zyrtec from prescription to over-the-counter status,” the company reported.

However, noted Walgreens in a statement, “January front-end sales were helped in part by sales of key beauty categories, basic necessities and consumables. Also, Zyrtec’s switch to over-the-counter status benefited front-end sales by 0.2 percentage points.”

Walgreens opened 23 stores in January, including four relocations. The chain also acquired four stores and closed one, ending the month with 7,154 locations in 49 states, the District of Columbia, Puerto Rico and Guam. That includes 6,658 drug stores, 586 more than a year ago.

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