The Annual Meeting of the National Association of Chain Drug Stores is once again upon us, though the calendar year hasn’t yet budged beyond April.
The significance of this annual meeting has nothing to do with the calendar, however. Rather, it comes along just as retailers and suppliers begin to get the tone of the new year, and signals the opportunity to gather and determine what’s right and wrong with U.S. retailing — and what can get fixed before too much more time goes by.
The issues thus far in the new year are not those major events that have often characterized the mass retailing community in the past. No new mergers or acquisitions are announced or contemplated, though acquisitions have reemerged as a major driver of business in both the retailer and supplier communities.
Rather, the talk approaching the NACDS Annual Meeting is mostly about small things — sluggish sales, stagnant traffic, a continued lack of new items to spur excitement and growth at retail, an absence of excitement in the supplier community that is perhaps a result of a sluggish first quarter at retail.
The more productive discussions these days concern the future of particular companies — and, more specifically, the directions in which they’re reportedly headed. This is particularly true of the major retailers, particularly those that, in the past, have been on sure footing where growth is the issue.
Walgreens comes to mind here, a company that has been recast in recent years by its newfound acquisition orientation. Indeed, among the issues surrounding Walgreens as the Annual Meeting approaches is its configuration as its acquisition of Rite Aid nears its completion. How will this merger change Walgreens? How will it affect Rite Aid? Will everything change? Will anything?
The Walgreens people who know the answers to these questions are thus far remaining mum. And speculation has overwhelmed conjecture.
Then there’s Walmart, always an enigma where future plans are concerned. This year, even Walmart people don’t appear to know the future. Or, if they do, they’re not saying much. Growth is the issue here. It’s no secret that Walmart’s sales are not increasing as rapidly or predictably as they have in the past. What that means going forward is still subject to debate and discussion. More to the point, where will future growth be coming from? From Supercenters? From traditional discount stores? From acquisitions? From offshore growth? From online activity? From a combination of some or all of the above?
These are serious questions in the mass retailing community, not only for suppliers but for those retailers that compete with Walmart. And who doesn’t?
Other questions continue to defy easy answers. CVS Health, for the moment, has emerged, or reemerged, as the darling of the chain drug community. But the question remains: Which of CVS’ many programs will drive future growth? Or will all of them play a part?
Target, like CVS in drug, has apparently reemerged as the darling of the discount store segment. Much of the credit rightly goes to the company’s chief executive, Brian Cornell. But questions about Target’s future still surround the company. Where is its future? Is it here in the U.S.? Will offshore growth still play a role, in the aftermath of the Canadian debacle? What will the role of e-commerce be going forward? Of urban stores? Of smaller stores? Where will the merchandising emphasis come to rest? What’s the future of food? Of grocery?
Other retailers planning to attend the NACDS meeting bring similar questions. Of particular interest is the suddenly emerging creativity apparent in grocery expansion. Apparently no longer satisfied with merely building new stores, supermarket operators are now opening exciting new stores, stores that are larger and more crammed with general merchandise than their predecessors. And what about drug stores? Is more-aggressive competition finally wearing them down? And the emerging forms of retailing? What inroads are they making? And what tolls are they taking?
Oh, well, the answers won’t be long in coming, particularly for those industry people who are even now packing their bags, contemplating their wardrobes and finalizing their reservations for the meeting that should be one of the more exciting — and productive — in recent memory.