Retail News Breaks
Holiday sales report: Drug chains pleasantly surprised
January 4th, 2010
by David Pinto
NEW YORK – Recession, unemployment, family, weather, an extra shopping day, convenience, price points under $10 and inventory management all impacted the 2009 holiday selling season. These factors combined to provide America’s chain drug retailers with a Christmas selling season most have gladly accepted — and a handful truly enjoyed.
In terms of numbers, the industry’s total holiday sales during the 28-day period between Thanksgiving and Christmas Eve advanced 6.8%, while same-store sales for the period increased 5.5%. These figures compare favorably with last year’s numbers of 3.8% and 1.3%.
The recession provided the backdrop for the season, tempering every shopping decision. The near-record unemployment rates in many states severely hurt the holiday shopping season, and millions of Americans sharply curtailed, downsized or eliminated their Christmas shopping excursions entirely.
However, the lure of family in these difficult times outweighed even unemployment as a factor in the 2009 holiday shopping experience.
“Anything that was family-oriented sold,” said the president of a Midwest drug chain known for a broad merchandise mix. “Electronics, clothing, housewares and especially pet supplies — we couldn’t keep them in stock.”
Other categories sold as well — or almost as well — provided they were offered at price points under $10. That was particularly true of toys, basic and premium candy, and electronics.
Trim-a-tree again proved a reliable category, though giftwrap disappointed. Greeting card sales were soft as well, primarily because shoppers didn’t send nearly as many cards this season as in seasons past — though online cards enjoyed strong holiday sales.
Such categories as gift sets and gift cards performed well, but many chain drug people bemoaned the fact that the basic beauty business was, on the whole, soft compared with previous holiday selling seasons.
Weather was a factor, as it always is — especially in the Northeast and mid-Atlantic states that were hit with a record snowstorm a week before Christmas — but surprisingly it was not the negative factor it had been the previous year, when storms and frigid weather hampered business in most of the country during much of the shopping season.
Moreover, any weather issues were largely offset by the additional shopping day — 28 versus 27 — that characterized this holiday season, and further ameliorated by that traditional chain drug strength: convenience.
Those two factors, combined with Christmas falling on a Friday, drove last-minute shoppers into chain drug stores in unusually high numbers. And the chain drug store’s merchandise mix turned out to be exactly what last-minute shoppers were looking for.
Chain drug merchandising efforts were particularly creative this year. Walgreen Co., for example, remained open on Christmas Eve and Christmas Day, with some 1,600 stores open 24 hours. Additionally, the Chicago-based drug chain tailored its mix to its customer base.
Rite Aid Corp. also brought aggressive merchandising to its selling effort, keeping nearly 4,800 stores open until 11 p.m. on Christmas Eve and opening many throughout Christmas Day — and, like Walgreens, offering some customers the convenience of 24-hour locations. As well, Rite Aid marketed heavily to the man looking for a gift for his significant other, with surprisingly strong results.
Finally, chain drug retailers proved surprisingly adept at managing inventories this year, buying less and getting the strongest sell-through thus far this century.
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