OPERATIONS

Wal-Mart and McDonald’s make Top 20 Best Companies for Leadership ranking

BY Marianne Wilson

Philadelphia — Wal-Mart Stores and McDonald’s were the only retailers to crack the Hay Group’s eighth annual Best Companies for Leadership Study Top 20 list.

The study surveyed nearly 18,000 individuals at more than 2,200 organizations worldwide to examine how companies develop their leaders and foster cultures of innovation. This year, Procter & Gamble led the Top 20. Wal-Mart ranked No. 7, and McDonald’s came in at No. 8.

According to Hay Group’s study, the Best Companies for Leadership are purposeful and strategic in developing, enabling and motivating leaders throughout the organization to do their best. In fact, 73% of the Top 20 companies reported giving everyone at every level of the organization the opportunity to develop and practice the capabilities needed to lead others, compared to only 47% of all other companies. These future-focused companies also look ahead to what roles are – and will be – mission-critical to their success, and then intentionally identify and develop leaders with the right skills to fill those roles.

To facilitate this process, the Top 20 companies reported doing more to develop their population of new and mid-level managers, with higher usage rates of web-based leadership modules (72% versus 39% at all other companies), classroom-based leadership training (80% versus 55% ) and mentoring by a senior manager or executive (68% versus 39%).

In other findings:

  • 82% of the Best Companies for Leadership use rewards or reprimands that are based on rigorous measurements of performance against goals, compared to only 58% of all other companies. Similarly, 89% of the Top 20 companies encourage employees to set challenging or aggressive goals, versus only 69% of all other companies.
  • 76% of the Top 20 companies reward and stimulate cross-business-unit collaboration to develop new business lines, compared to only 54% of all other companies.
  • The Top 20 companies are also more likely to encourage employees to learn in areas outside of their areas of expertise (70% versus 48%) and to recognize and reward employees for really new and different business ideas (77% versus 58%).
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REAL ESTATE

Calypso St. Barth signs into Malibu Country Mart

BY Michael Fickes

Malibu, Calif. — Calypso St. Barth will open its fifth Southern California store on Oct. 18, at the Malibu Country Mart. Existing SoCal stores are in West Hollywood, Brentwood, Century City and Montecito.

Malibu Country Mart encompasses six acres and leases to 68 tenants offer high-end retail, dining and services.

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News

Rite Aid enjoys fourth-consecutive profitable quarter

BY CSA STAFF

Rite Aid reached a milestone in its store conversions and saw growth in the latest expansion to its loyalty program as it posted its fourth-consecutive profitable quarter.

During the second quarter of fiscal year 2014, the number of stores in the chain that have been converted to the Wellness and Genuine Well-Being formats surpassed the 1,000 mark, with the total number of stores converted totaling 1,019 — including 114 under the newer Genuine Well-Being format — and expected to reach 1,200 by the end of the year.

In a conference call with financial analysts to announce the quarter’s results, CFO Frank Vitrano said Wellness stores’ front-end same-store sales led non-Wellness stores’ by 3.4%, while same-store script count led by 0.9%. One key part of the Wellness format is the Wellness Ambassadors, specially trained staff who help customers with questions they have about health and wellness products and also help to funnel them toward the pharmacy; as of the end of the quarter, there were 1,700 Wellness Ambassadors working in stores.

Wellness65+, a supplement to the Wellness+ loyalty card program aimed at elderly customers, had 930,000 members enrolled as of the end of the quarter, and president and COO Ken Martindale said that seniors had been "very receptive" to it. Part of the promotional efforts around the program included a tour around the country, with 65 events in eight markets, thus allowing employees to build relationships with senior customers. Other wellness-related programs include flu vaccinations, and chairman and CEO John Standley said they were off to a "strong start" in the 2013-2014 flu season; the company aims to vaccinate 2.5 million people during the fiscal year.

As the chain cycles through the customers it gained during the dispute last year between Walgreens and Express Scripts, same-store script count was flat compared with second-quarter 2013, but offset by organic script count growth. Pharmacy same-store sales were up by 1.7% and included a 2.5% negative effect from new generic introductions. Standley said during the call that new generics have been stronger than expected, but cost increases for generics have also been higher, and the company expects that to put pressure on the company’s guidance over the next two quarters.

Sales for the quarter were $6.3 billion, up from $6.2 billion in second quarter 2013, while profits were $32.8 million, compared with a $38.8 million loss a year ago. Same-store sales were up by 1%, including the aforementioned increase in pharmacy comps and a 0.3% decrease in front-end comps. The chain operated 4,604 stores.

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