Pharmacy Woes Hurt Walgreens Overall December

Walgreens posted December sales of $6.71 billion, down 4% from the fiscal 2012 month. Total front-end sales, including general merchandise such as home furnishings and housewares, decreased 1.3% versus December a year ago, while comparable store front-end sales decreased 2.3%.

Customer traffic in comparable stores decreased 4%, according to the company, while basket size increased 1.7%. December pharmacy sales slipped 4.9% while comparable store pharmacy sales decreased 8.9%. Overall comparable store sales tumbled 6.1% in December. Calendar day shifts negatively impacted total comps by 1.3 percentage points, Walgreens asserted, while it said generic drug introductions in the last 12 months reduced total comparable sales by 3.2 percentage points.

Joseph Agnese, a Standard & Poor’s analyst, observed in a research note that Walgreens business still feels the effects of its dispute with benefits services provider Express Scripts. Now that Walgreens has inked a new Express Scripts agreement, the ability to recover customers who went to other pharmacy operators in the interim to have their prescriptions filled is key going forward. The traffic generated by customers visiting the pharmacist is critical to driving ancillary sales including those in the front end.

Walgreens opened seven stores during December, acquired one and closed four. As of December 31, Walgreens operated 8,524 locations in all 50 of the United States, the District of Columbia, Puerto Rico and Guam. That includes 8,061 drugstores, 243 more than a year earlier. The company also operates infusion and respiratory services facilities, as well as specialty pharmacies and mail service facilities. Its Take Care Health Systems division manages more than 700 in-store convenient care clinics and worksite health and wellness centers.