Deerfield, Ill. Walgreen Co. said same-store sales fell 0.3% in December instead of rising as Wall Street had expected. Total sales in December rose 3.6% to $6.3 billion.
Same-store pharmacy sales rose 1.8%, but front-end sales dropped 3.1%. In comparable stores, customer traffic fell 0.8%, and the average sales per transaction fell 2.3%.
The company attributed much of the drop in general merchandise sales to its decision to sell fewer seasonal items.
“In December 2008, we significantly discounted seasonal merchandise after buying substantial inventory in anticipation of a strong holiday season,” said Walgreens president and CEO Greg Wasson. “This year, we took a more cautious buying approach and invested 28% fewer dollars in seasonal items for comparable stores. This significantly impacted holiday clearance sales, but it also positioned us to enter the new year in a better inventory position and with better gross margins compared with a year ago.”