Hibachi Grill & Supreme Buffet to open at Blue Star
Watchung, N.J. — North Plainfield, N.J.-based Levin Management Corp. said that Hibachi Grill & Supreme Buffet has leased 8,500 sq. ft. at Blue Star Shopping Center in Watchung, N.J., becoming the latest eatery to join the 419,000-sq.-ft. retail property.
The free-standing restaurant will open in early 2013.
Levin Management is the shopping center’s leasing and managing agent. Blue Star is anchored by Kohl’s, ShopRite, Marshalls (which recently extended its long-term lease), Michaels and Toys "R" Us.
Rite Aid reports first profit in five years
CAMP HILL, Pa. — Rite Aid beat analyst expectations in third quarter 2013 as the generic wave and retention of Express Scripts customers helped drive better-than-expected adjusted EBIDTA and produced the company’s first profitable quarter in five years.
"I am proud that we have achieved this significant milestone by putting our customers first and challenging ourselves to better serve them," Rite Aid president, chairman and CEO John Standley said in a conference call with Wall Street analysts Thursday morning.
The company reported sales of $6.2 billion, a 1.2% decrease compared with third quarter 2012’s $6.3 billion due to the introduction of new generics and store closings. Same-store sales decreased by 1.5%, as a 2.7% decrease in pharmacy comps due to new generic introductions offset a 1.1% increase in front-end comps, though same-store prescriptions filled increased by 3.6%, including the addition of new prescriptions from the dispute between Walgreens and Express Scripts. At the same time, the company posted a profit of $61.9 million compared with third quarter 2012’s loss of $52 million. The chain’s last profitable quarter was first quarter 2008, reported in June 2007.
Even though the Walgreens-ESI dispute has been resolved, Rite Aid has managed to retain the "vast majority" of those who moved over, CFO and chief administrative officer Frank Vitrano said during the call.
One reason is that the company has aggressively sought to enroll those customers in the Wellness+ loyalty card program, which had approximately 25 million active members during the quarter, a 5% increase over the same period last year, of whom gold and silver members are the most active. Members accounted for 76% of front-end sales, compared with 72% in third quarter 2012, as well as 67% of prescriptions filled, compared with 66% during the same period last year, leading COO Ken Martindale to call it the "richest and most rewarding program" in the industry. "I think there’s still an opportunity out there to continue to educate people who don’t understand the program," Martindale said, adding that research the company has done suggests that when customers do understand it, it changes their front-end shopping habits for the better and helps retain them.
Another contributor to front-end sales has been the Wellness store format. The chain currently has 687 stores converted to the format and expects to have 780 converted by the end of fiscal year 2013; it also has trained nearly 1,100 Wellness Ambassadors. This has helped contribute to the 300 basis points lift in front-end sales at the Wellness stores compared with non-Wellness stores. In addition, the company plans to expand the updated Wellness store format, currently showcased in the Lemoyne, Pa., store featured in a recent Drug Store News video.
Immunizations have seen a strong boost as well, with 1.8 million immunizations delivered to date and plans to administer 2 million this year, thanks to a stronger flu season. "We’re using this opportunity to educate patients about immunizations and other clinical services," Standley said.
The company’s adjusted EBITDA beat analyst projections, coming in at $277.2 million. Guggenheim Securities had projected adjusted EBITDA of $247.3 million. "We believe the generic wave will power above-trend near-term operating momentum and we would remain buyers of the stock," Guggenheim analyst John Heinbockel wrote.
Wall Street reacted positively as well, as Rite Aid’s stock opened at $1.17 per share and jumped to $1.21 before settling at $1.17 around 10 a.m. EST, having closed at $1.04 per share on Wednesday.
For an in-depth look at Rite Aid’s turnaround check out Retailing Today sister publication Drug Store News’ recent issue, click here.
Walmart versus the New York Times
Walmart’s ongoing investigation into bribery allegations was thrust into the spotlight again this week after the New York Times published results of its own investigation.
The New York Times lengthy, detailed and thoroughly sourced article detailed how Walmart employees in Mexico used an elaborate series of payments to accelerate construction of a controversial store in Mexico City. The store in question was highly controversial at the time of its construction due to a location near ancient pyramids in Mexico City. According to the New York Times, "Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited."
The article was a follow-up to an equally extensive piece that appeared in late April that asserted Walmart executives were aware of corruption in Mexico but failed to act. Walmart disputed that assertion at the time and maintained it had previously disclosed its own investigation in documents filed with the Securities and Exchange Commission in late 2011, well before the original New York Times article appeared April 22.
The most recent article prompted a swift response from Walmart in which it acknowledged the ongoing investigation and expressed regret that it couldn’t share more details.
"The allegations contained in the New York Times article surrounding events in 2003-2004 involving the permitting and licensing process for a Walmart de Mexico store in Teotihuacan, Mexico, have been part of the company’s ongoing investigation of potential violations of the U.S. Foreign Corrupt Practices Act we began more than a year ago," Walmart spokesman David Tovar said in a statement released Monday night. He noted that the investigation is being overseen by an audit committee of the board that is composed entirely of independent directors and that Walmart is cooperating with the Department of Justice and the Securities and Exchange Commission. "At this point, the investigation is still ongoing and we have not yet reached final conclusions. A thorough and independent investigation will take time to complete. We wish we could say more but we will not jeopardize the integrity of the investigation."
Walmart maintains that it is committed to a strong and effective global anti-corruption program and detailed how over the course of the past 20 months it has established several new compliance positions around the world, directed more than 300 third-party legal and accounting experts who have dedicated more than 79,000 hours to the effort, conducted more than 85 in-country visits and more than 1,000 interviews of market personnel, spent more than $35 million on new processes and procedures and conducted training sessions attended by more than 19,000 employees.
The company also shared an internal memo distributed on December 17, in which president and CEO Mike Duke addressed the New York Times article and the importance of acting with integrity.
"Leading on integrity begins with me and our executive team, and it depends on each of you," Duke said. "As leaders, we are measured by our weakest moment, so we can’t have a weak moment in the area of integrity. We can have a bad sales day and a good sales day and hope they average out, but we can’t average integrity. The only way our company can grow and thrive is for every Walmart associate to do the right thing – 24 by 7 in every country that we operate in."
He also repeated a familiar theme regarding how Walmart, because of its success, faces higher expectations from customers and employees.
"I love that the world looks to us as a leader," Duke said. "Walmart has an influencing role, and we must lead by example and help raise ethical standards overall. As I have said all along, we will use these events to raise the bar and make Walmart an even better company. We have ensured that the ongoing investigation has the time and resources it needs to get to the bottom of what happened."
To date, those resources total $99 million. That is the amount Walmart said it has spent on its FCPA investigation during the first nine months of its fiscal year.
To read Monday’s article in the New York Times, click here.
For a detailed look at Walmart’s compliance and anti-corruption efforts and to read the company’s response to the New York Times article, click here.
To read the original New York Times article that appeared April 22 click here.