Value, convenience key to successful Christmas - chain drug Christmas business

Value, convenience key to successful Christmas

NEW YORK -- Drug chains with practical inventory levels who appealed to cautious consumers' inclination toward value and convenience fared best during a Christmas season that produced mixed results for drug retailers.

Spooked shoppers, who made a miserable season for department stores, also bedeviled drug chains in some regions. The recession and the Persian Gulf crises fostered a pennypinching mood.

Fluctuating December weather turned the season into a game of "Wheel of Fortune" in many regions as chains encountered erratic surges of business and rooted for a bang-up final weekened. The calendar worked in retailers' favor with an extra week between Thanksgiving and Christmas, and a three-day shopping weekend with Christmas falling on a Tuesday.

There was no easy way to generalize. The drug industry showed some of its cork-like ability to resist economic doldrums.

Cautious consumers

"We saw ... cautious consumers who were reacting to a softening economy," said Eckerd spokesman Gene Ormond.

High gas prices fueled by the Gulf crisis and tight budgets encouraged shoppers to forgo trips to regional shopping malls in favor of "fill-in" visits to the durg store, said Ormond.

"We feel that our sales were good given the economic conditions. While they were somewhat below our projections, we are plased with out overall performance, especially compared to other retailers," said Ormond, noting that Eckerd's slaes beat last year's.

Hopeful signs

Signs of revival appeared in the South Central states beset in recent years by a slumping oil economy.

"You're dealing with a region of the country that hasn't been that affected by the economy crunch during the past few months. To date, it looks like it's going to be one of the best self-throughs we've had in years" on relatively high inventories, May's Drugs' Russ Smith prodicted a week before Christmas.

The Oklahoma chain was shifting merchandise from store-to-store to cover demand as trim-a-tree and light sets move briskly.

Smith's vision proved true as May's hit "close to double digits" for the season, despite two "lost" weekends before Christmas and New Year's due to ice and snow storms, said May's chairman Jerry Heller.

Candy sales made Christmas at nearby K&B where "recession talk kept people from buying big ticket [items]," said president Jim LeBlanc.

"We had a very good November, and then, all of a sudden, when the calendar page turned over, the first 20 days of December were weak -- below expectations. But from around Dec. 20 on, things got busy again, and we ended up close to what we had anticipated," said LeBLanc.

Midwest consumers worried

Chains reported mixed results in the Midwest where consumers were worried.

"Lots of folks are out of work and scared about their futures. The media have done a good job of scaring people to death," said Don Beeler, chairman and ceo of Snyder's Drugs. Snyder's logged a flat holiday.

There were Midwest Christmas miracles. A Walgreens spokesperson said its same-store seasonal results were "even better than Wal-Mart's," as Walgreens reported a 10 percent gain in December sales (6.2 percent in the month's same-store sales).

Arbor Drugs posted strong sales in the season's first weeks with liquor sales and gift buying leading the way.

Some chains reported slow sales in December's first months as unseasonably mild weather in the Northeast and Midwest was said to dampen shoppers' holiday buying spirits. By mid-December, one brief snowfall had failed to create a shopping mood in Cleveland, and Ken Fossaceca, gm buyer, merchandiser, at Medic Discount Drugs.

"We're starting to see some good turns right now as the season gets underway ... it's beginning to look more like a traditionally strong Christmas- selling season," Fossaceca said.

Northeast sales were said to be poor.

But Pittsburgh-based Thrift Drug went into the season posting sales ahead of the previous year, though short of budgeted sales, a spokesman said.

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