Think Walgreens CEO Greg Wasson is concerned that sales and profits reported lower in the fiscal first quarter of 2013 than a year ago?
Maybe, but what he’s really thinking about is private label. The CEO took time in prepared remarks to analysts Friday to single out the company’s successes.
“We’re also seeing significant momentum in our private brands,” Wasson told analysts, according to transcripts from Seeking Alpha. “We’ve invested heavily in our own brands, including Walgreens, Delish, Nice! and many more, and year-over-year private brand penetration in our front-end sales improved 200 basis points to 22 percent.
“In my 32 years, I’ve never seen our store managers as excited as they are now about our private brand offering.”
Walgreens Vice President of Retail Brands and Global Sourcing Moe Alkemade will be at the PLB360 Conference in June to discuss the company’s recent private label plans and strategies. Walgreens ranked 12thon the PLBuyer Top 35 list, released in October, but an increase of private brand penetration to 22 percent would push projected 2013 private label sales past $5.6 billion, ahead of Sam’s Club for 11thon the list.
Wasson said Walgreens added Alliance Boots’ No7 product to its beauty line in the quarter, “debuting it at our Hollywood flagship opening with very good early results.” It’s a continuation of the private label strategies that he said are hitting home for the drugstore chain.
“Our reinvigorated private brands, led by Nice! and Delish, are creating brand loyalty and increasing margins for our Daily Living business,” he said.
As for the quarter, with Walgreens matching a comparable quarter in 2012 that included Express Scripts customers, sales were down 4.6 percent in the quarter to $17.3 billion. Same-store sales were off 8 percent, though only down 2 percent in front-end sales. Prescription same-store sales were down 11.3 percent.