Inside This Issue - News
Holiday sales a disappointment for drug chains
January 2nd, 2012
NEW YORK – Absent the last-minute shopping surge that rescued holiday sales a year ago, Christmas 2011 was in the main a dismal event for the nation’s drug chains.
The holiday shopping season that began on Friday, November 25, and ended 30 days later on Christmas Eve — giving the retail community one more shopping day than Christmas 2010 offered — was notable primarily for its length and for little else.
In a season that proved a disappointment across retail trade channels, consumers mustered very little enthusiasm for the basic chain drug holiday assortment, one that had proven adequate in the past. True, the final shopping days did bring with them a mini-burst of consumer enthusiasm for such basic chain drug holiday merchandise as trim-a-tree, gift wrap, gift cards, low-end toys, holiday candy, gift sets and, especially, greeting cards.
Also, the weather largely behaved, save for a blizzard that swept through the Midwest during the week before Christmas.
Meanwhile, unseasonably warm weather in the eastern third of the country was blamed in some measure for the lack of holiday excitement.
But this was hardly sufficient compensation for a period marked not only by the absence of holiday buying but by the disappearance of a basic beauty care business and the dreary performance of prescription and over-the-counter drugs.
Consumers simply refused to get sick through most of December, catching cold or complain of flu-like symptoms only as the month neared its end.
Chain drug sales for the 30-day period between Thanksgiving and Christmas advanced 4.4%, compared with a 5.4% gain a year ago and a 6.8% increase in 2009. Same-store sales advanced by just 2.2%, against 3.4% a year earlier.
Drug chains were hurt by several factors: a general malaise that dampened the holiday season; the intense, nonstop competition from on-line retailers; and the aggressive promotions that punctuated the department store holiday efforts, promotions that proved irresistible for hoards of shoppers.
Against this competition America’s drug chains had little to offer except accessible price points on basic holiday merchandise. It wasn’t nearly enough.
True, the nation’s chain drug retailers bought cautiously in advance of the holiday shopping season and managed their inventories with their usual efficiency. While the week between Christmas and New Year boded well, as it always does, for chain drug retailers, that was the extent of the good news.
The nation’s drug chains were also adversely affected by the absence of a blockbuster item that helped rescue Christmases past. Drug chain’s offerings in electronics, housewares, household items, basic clothing and pet supplies couldn’t compete effectively for shopper attention or sales.
The result of all this is that, for America’s drug chains, Christmas just isn’t what it used to be. It is no longer the premier seasonal event on the chain drug promotional calendar — Halloween has largely assumed that role.
As Christmas dwindles in importance, only the post-Christmas cleanup and chain drug’s ability to manage its inventory keeps this holiday in the forefront of industry attention.
However, what worked once to bring shoppers to chain drug stores for the holidays no longer works as automatically and effectively as it once did.