FINANCE

Walgreens Q3 sales up 3.3%

BY Michael Johnsen

Deerfield, Ill. — Walgreens on Wednesday posted third-quarter sales of $18.3 billion, up 3.3%.

Same-store sales were up 1.3%, with front-end comparable store sales up by 0.3% and pharmacy comp sales up 2%. Prescriptions filled were up 7% for the quarter.

Walgreens reported that more than 72 million Walgreens faithful have signed on for the company’s Balance Rewards loyalty program through May.

Walgreens’ May sales totaled $6.2 billion, representing an increase of 4.3%, with a 2.8% lift in same-store sales. Prescriptions filled at comparable stores increased by 7.1% in May and increased 7.5% on a calendar day-shift adjusted basis. This year’s May had one additional Friday and one fewer Tuesday compared with May 2012. These calendar shifts negatively impacted prescriptions filled at comparable stores by 40 basis points.

May pharmacy sales increased by 4.4%, while comparable store pharmacy sales increased 3.8% and increased by a calendar day-shift adjusted 4.2%.

Pharmacy sales accounted for 63.1% of total sales for the month.

Total front-end sales increased 3.4% compared with the same month in fiscal 2012, while comparable store front-end sales increased 1.2%. Customer traffic in comparable stores decreased 3.5% while basket size increased 4.7%.

Walgreens opened 13 stores during May, including two relocations, and closed one.

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OPERATIONS

Stripes names senior VP store ops, and senior VP facilities and construction

BY Staff Writer

Corpus Christie, Texas — Susser Holdings Corporation announced that its Striples LLL brand has Sid Keswani as senior VP store operations. Keswani brings to Stripes more than 18 years of retail operations experience with Target, most recently as senior VP for the Southeast region of the United States.

Stripes announced that company veteran Richard Sebastian has taken on the role of senior VP of facilities, construction and will be responsible for the company’s maintenance, new store and capital expenditure programs.

In related news, Stripes said it recently opened two new Stripes convenience stores, bringing the total number of new stores completed to eight since the beginning of the year.

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News

Another BRIC in the e-commerce wall

BY Dan Berthiaume

Chicago — During a morning keynote session on Wednesday at the Internet Retailer Conference in Chicago, former Vice President and self-described “recovering politician” Al Gore related a couple of interesting facts about how the Internet is shaping modern commerce. First, he stated that when an online network increases in size its value increases by a squared amount, so that for example a network that doubles its number of users quadruples in value.

Second, he stated that Chinese e-commerce site Alibaba.com had a higher sales volume in the last quarter of 2012 than Amazon.com and eBay, although the combined financial value of those online retailers’ sales was still much higher. In short, the Internet is bringing the world closer together and also increasing the importance of consumers in the developing world.

Wendy Jones, VP of geographic expansion and cross-border trade for eBay Marketplaces, expounded on this theme further in a later unrelated session. Jones cited some sobering statistics on how e-commerce is increasingly becoming dominated by the emerging world and particularly by the four BRIC nations of Brazil, Russia, India and China. According to Jones, by 2015 91% of new Internet users will live in emerging markets and they will account for 55% of global e-commerce growth.

“The BRIC nations represented 13% of 2011 global retail sales compared to 2.5% 10 years earlier,” said Jones. “They are buying high-end luxury goods and services as a brand-conscious middle class emerges. These new consumers are in their mid-20s, affluent and highly engaged. They follow influencers and word of mouth is powerful when it comes from their network.”

In the case of eBay, in 2012 the retailer had 6 million customers in BRIC and other emerging markets who represented $3.2 billion USD in sales. Jones said eBay’s current highest priority is Russia.

“We are the largest B2C commerce player in Russia by volume,” she said. “In 2012 we sold $400 million of goods in Russia. We get 30,000 touches daily.”

To do online business in emerging markets, Jones recommended retailers follow one of three basic models: launch their own locally targeted e-commerce site, partner with a third-partner platform site (such as eBay) or partner with a local reseller that knows customs, laws and preferences.

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