Walgreens, defying economic swoon, notches respectable gains in December

DEERFIELD, Ill. Pushing upstream against a dismal economic climate, Walgreens managed a gain of nearly 5% in comparable-store sales in December, with total sales rising 10.8% over prior-year levels to $6.1 billion.

Comp-store sales swelled 4.9% over the same month in 2007, Walgreens reported today, with “steady consumer traffic throughout the month” and a December increase in customer transactions of 0.7% in stores open more than a year.

Behind the relatively rosy numbers, however, lie two caveats. For one thing, most of the comp-store gains came courtesy of strong pharmacy sales, which were up 8.5% over December 2007 levels on a same-store basis. By comparison, sales at the front of the store edged up just 0.4%, clearly underscoring the nation’s abysmal level of consumer demand through the crucial holiday season.

In addition, Walgreens acknowledged, the December 2008 selling period got a boost from calendar day shifts, as pharmacy patients fill more prescriptions during the week than on weekends. “This year, December had two more weekdays compared to December 2007,” the company reported. “Calendar shifts positively impacted total comparable store sales by 2.0 percentage points, comparable pharmacy sales by 3.4 percentage points and prescriptions filled in comparable stores by 3.3 percentage points.”

Front-end sales were not impacted by the day shift, Walgreens added.

Helping to keep front-end sales from slipping into negative territory were “strong sales of basic necessities, consumables and key beauty categories,” according to the company. “Also, Zyrtec’s switch to over-the-counter status benefited front-end sales by 0.4 percentage points.”

Nevertheless, Walgreens reported, “December sales were hurt by weakness in seasonal categories as consumers continue to focus on non-discretionary purchases.”

Walgreens opened just two stores during December, acquired five stores and closed one, ending the calendar year with 7,131 locations in 49 states, the District of Columbia, Puerto Rico and Guam. That includes 6,636 drugstores, 596 more than a year ago, as well as worksite health centers, home care facilities and specialty, institutional and mail service pharmacies.

Walgreens said its Take Care Health Systems subsidiary now manages 678 in-store convenient care clinics and worksite health and wellness centers. Franchisees of Option Care, Inc., a wholly-owned subsidiary of Walgreens, are not included in Walgreens’ location or store count.