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Drug chains post modest sales gains during holidays

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NEW YORK — Drug chains were not immune to the shift in holiday shopping away from brick-and-mortar retailing, as sales growth barely exceeded 4%.

That was down from last season’s 4.4% advance in holiday retail sales, and well off the 5.4% gain of five years ago. Same-store sales were up 1.8%, virtually unchanged from 2014.

Last-minute shoppers, who flock to stores just prior to Christmas, couldn’t lift the channel any higher. Up to two-fifths of the season’s sales occur in the week and a half before Christmas, according to the National Retail Federation. That includes Super Saturday, the Saturday before Christmas, which has overtaken Black Friday as the busiest shopping day of the season, according to ShopperTrak.

Holiday sales chart_2015With a disappointing Black Friday and a jump in e-commerce, the week before Christmas this year took on added importance for brick-and-mortar chains. Even with the holiday shopping season starting ever earlier in November, consumers were holding out until the eleventh hour in hopes of discounts.

Almost three in five surveyed by NPD Group said they hadn’t finished half or more of their shopping as of December 13, up from 50% who said the same thing in 2014.

The lackluster showing of brick-and-mortar stores over the Thanksgiving and Black Friday weekend — sales dropped 4.7% from a year earlier on a 5.1% decline in store traffic — was not necessarily a blow to major retailers, as they were able to capitalize on online ­demand.

“The sales and traffic numbers only tell a partial story, as retailers with strong digital businesses saw an uptick in the online channels that will positively impact the overall performance of the brand,” said Shelley Kohan, vice president of retail consulting at RetailNext. “The weekend continued to demonstrate the emergence and importance of mobile shopping, and shoppers increasingly used digital devices to shop brands, research products, compare pricing and make ­purchases.”

The weekend sales dip notwithstanding, stores did better than they had in the five preceding months. Sales per shopper were up 0.3% over the holiday weekend, driven mostly by a 3.1% increase in average transaction value. Conversion slipped slightly by 0.5%, in part due to the early Cyber Monday sales promotions started over the weekend, as well as savvy shoppers recognizing the end of the weekend does not denote the end of holiday price discounts and promotions.

“The results for physical retail are generally positive when considering the growing influence of digital shopping, particularly in the mobile channel,” commented Kohan. “Over the holiday weekend, there were patterns of strong results for retailers with less effective digital channels, and they outperformed on the brick-and-mortar side of the business.”

“Of course, the flip side was true for brands with strong digital presences and who offered a seamless multichannel experience, and it’s those brands who have a head start into retail’s most important season,” she added.


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