Fred’s sets forth major growth plans
MEMPHIS, Tenn. — Fred’s Pharmacy has set forth a major initiative intended to promote growth in 2017 in its front store, retail pharmacy and specialty operations, CEO Michael K. Bloom stated Thursday during the company’s 2016 fiscal fourth-quarter earnings conference call.
In the front store, Fred’s is expecting top-line growth, led by the rollout of beer and wine and a major upgrade to its cosmetics assortment.
The company is also already undergoing improvement initiatives to improve category reporting, planograms, off shelf and seasonal planning, circular promotions and joint business planning. Fred’s expects progress in the following front-store areas:
Implementation of new vendor funding tool in its 2017 fiscal Q1
Launch of a mobile app that will integrate the existing pharmacy app
Levering of its new JDA platform
Continuation of supply chain initiative focused on driving lower selling, general and administrative expenses
In the retail pharmacy, Fred’s will be implementing Vistaar’s retail pharmacy pricing solution; piloting concepts related to “centers of excellence” for specific disease states; and actively pursuing the use of alternative dispensing technology.
Specialty pharmacy has already been a pillar of strength for Fred’s and it expects 2017 to result in more sales growth. Recent successes in specialty pharmacy have come from internal reorganization; geographic expansion; and an infusion of new talent providing excellent patient service in hepatitis C, rheumatology, multiple sclerosis, growth hormone therapy and oncology.
“Simply stated, we have a plan,” Bloom said during the conference call. “We are executing it and seeing results.”
Bloom added to further encourage growth, Fred’s has implemented salary increases for store managers and is paying healthcare premiums for employees. “Reducing turnover improves profit,” he said.
As for Fred’s December announcement it plans to purchase at least 865 divested Rite Aid stores should the Federal Trade Commission approve the Walgreens Boots Alliance-Rite Aid merger, Bloom noted Fred’s continues to work collaboratively with Walgreens and Rite Aid to get the proposed transaction approved and remains committed to purchasing up to 1,200 stores, which would make it the third-largest drug store operator in terms of store count.
The company stated on the call it could not answer specific questions regarding the pending transaction. However, when questioned by a Wall Street analyst during the question-and-answer portion of the call regarding its ability to transition from a regional operator in 16 states to a national drug store operator, Bloom stressed Fred’s “certainly has assembled the team to get it done.”
For a rundown of Fred’s fiscal 2016 Q4, full-year 2016 results and March 2017 earnings results, click here.