Private Label Buyer

CVS Says Private Label Sales Up In Fourth Quarter

February 6, 2013

CVS Caremark reported fourth-quarter earnings Wednesday and said its private label share of front-store sales rose to end the year.

CVS CEO Larry Merlo told analysts on a conference call that the second-largest drugstore chain in the U.S. saw front-store private label share rise 20 basis points to 18.1 percent in the quarter.

“I’m sure you’re not surprised to hear that we saw particular strength in cough and cold, allergy, and flu-related sales,” Merlo said, according to transcripts of the call from Seeking Alpha. “And we also continued to see solid sales and share growth in the beauty category, driven by skincare and cosmetics.”

Same-store sales rose 4 percent in the quarter, helping earnings rise 28 percent for the quarter from the previous year. Full-year earnings for 2012 were up 23 percent from 2011.

Merlo said CVS gained 2.26 percent market share on its drug channel competitors in front-store sales from a year ago, while gaining 0.17 percent market share on other multi-outlet competitors.

The company also announced that it bought Drogaria Onofre, a retail drugstore chain in Sao Paolo, Brazil, that has 44 stores. It is the first international expansion for CVS Caremark.

Mark Cosby, executive vice president, told analysts that the focus on 2013 for the retail business was personalization.

“So our whole goal is to move away from the mass approach and to customize our approach to each individual customer,” he said, according to Seeking Alpha transcripts. “We’re doing that through how we are clustering our stores, which means personalizing the assortment within each store.”

CVS also is rolling out its new household private label line, Total Home, as well as its revamped consumable private brand, Gold Emblem, in the first quarter.

“Over the next several years, growing and enhancing our store brand offerings continues to be a priority,” CVS Director of Public Relations Erin Pensa told PLBuyer exclusively last month. “CVS/pharmacy offers consumers the convenience of a one-stop shopping destination to find all their health, beauty and household essentials. And the vast array of store brands and exclusive lines that we have developed offer customers an even greater selection of products to choose from, delivering addition value and innovation to meet customers’ ever-evolving needs.”