Credit Suisse Previews Drugstores December Sales Data

According to Edward J. Kelly of Credit Suisse, the promotional environment at drugstores was likely as competitive as ever during the Holiday season. Kelly notes that recent Nielsen data indicates continued weak traffic trends were offset by price and mix as well as an uptick in percentage of items on promotion. The analyst believes that overall volume trends continue to be impacted by drugstores “relatively high” pricing and lack of product differentiation. Kelly estimates that script growth for chain drugstores grew in the low to mid-single digit range throughout December, in-line with what was seen in November. Average script growth through the first two weeks of December grew approximately 3.9 percent from a year ago. Kelly projects

will report total comps rose approximately seven percent in December when the company announced December sales on Tuesday, January 6. The analyst adds that Walgreens' will report a pharmacy dollar comp increase of approximately 10.5 percent while calendar-adjusted script growth (ex. Flu impact) will be 4.0 percent. Finally, front-end comp is estimated to rise by 1.0 percent with a -1.0 percent traffic comp and +2.0 percent basket growth.

will report its December sales on Friday, January 2nd. Kelly estimates that the company's pharmacy comp in December grew approximately six percent, including a generic impact of 240 basis points. The analyst adds that front-end comp is expected to rise 0 percent to one percent.