Higher Rx Sales Drive June Numbers
CVS Corp. and Rite Aid Corp. reported higher monthly sales, helped by strong revenue from pharmaceuticals, according to a report in The Wall Street Journal.
CVS total sales for the five weeks ended June 29 increased 9.4 percent to $2.29 billion, compared with a year-earlier $2.1 billion. Pharmacy sales accounted for about 67 percent of total sales. Sales at stores open at least one year climbed 9.1 percent. Same-store pharmacy sales were up 12.1 percent, although CVS says new generic drug substitutions for higher-priced brand-name pharmaceuticals subtracted 1.5 percent from revenue. Same-store nonprescription, or front-end, sales rose 3.6 percent in June.
At Rite Aid, total drugstore sales for the four weeks that ended June 29 rose 5.2 percent to $1.21 billion from $1.15 billion a year earlier. Prescription revenue accounted for 63 percent of sales. Third-party prescription revenue from insurance, represented nearly 93 percent of the pharmacy sales. Same-store sales climbed 7.9 percent in June, while same-store pharmacy sales jumped 11.8 percent Same-store front-end sales rose 1.8 percent.
Moderator Comment: How important are non-Rx sales to the performance of drug stores? What do drug stores need to do to grow this part of their business?
Regulars to RetailWire know that we have great admiration for the job Robert Miller and company are doing at Rite Aid. Front-end growth of 1.8 percent (or 2.5 percent for that matter) is not going to get it done. The profit pressures of third-party plans and generics make it imperative that drug stores find ways to grow sales of profitable OTC and other products. [George Anderson – Moderator]