The discount store and pharmacy chain said that for the five weeks ended Dec. 31, sales totaled $222.9 million, down 3.9% from $232 million a year earlier. For the month, same-store sales fell 3.4% versus a gain of 2.4% in the prior-year period.
“Our pharmacy department saw a 2% increase in comparable prescription growth in the current month, when adjusted for 90 days’ scripts. The company also reported positive comparable sales in health and beauty along with key holiday categories, which posted strong year-over-year growth,” Fred’s chief executive officer Michael Bloom said in a statement. “However, this wasn’t enough to completely overcome headwinds related to the impact of reduced SNAP benefits, competitive promotional activity and unusually warm weather, which had a negative influence on seasonal categories.”
For the year to date, overall sales dipped 0.8% to $1.978 billion from $1.994 billion in the year-ago span. Comparable-store sales were down 2% in the period, compared with a 1.5% increase a year ago.
“Looking more broadly at our business, we believe the key marketing and merchandising initiatives we have implemented will drive future sales, traffic and profits, and represent a solid strategic response to the near-term challenges we are currently experiencing,” Bloom stated. “Between the launch of Category Management University, our robust analytics tools that allow us to better track consumer behavior, and numerous other strategies aimed at increasing sales, we remain confident in Fred’s long-term prospects.”
Last month, Fred’s agreed to acquire 865 Rite Aid stores in connection with Rite Aid Corp.’s pending acquisition by Walgreens Boots Alliance, which must divest stores to gain antitrust clearance for the transaction. Bloom has said the addition of the Rite Aid stores will spur Fred’s growth strategy, which centers on sharpening the retailer’s health care and pharmacy focus.
Fred’s Pharmacy and subsidiaries currently operate 647 discount general merchandise stores and three specialty pharmacy-only locations in 15 states in the southeastern United States. Included in the store count are 18 franchised locations. Also, there are 370 full service pharmacy departments located within Fred’s stores, including four franchised locations.