Is Eckerd Remedy Bad Medicine?
Executives at Eckerd Drug Stores believe they have found some medicine to cure the chain's figures for comparable-store sales, the closely watched measure of a retailers' continuing business. But some retailing specialists aren't so impressed.
When the J.C. Penney Co. unit recently said it would relocate and expand about 100 of its 2,686 stores, Eckerd Chief Executive Wayne Harris told analysts he expected the move to begin lifting same-store sales as early as the second half. However, comparable-store sales traditionally have been used to track the activity of stores that have been open at least a year.
Eckerd says it is permissible immediately to include relocated stores and expanded stores in its same-store tally. Mr. Harris says it is "a generally accepted method for most food and drug retailers" to include relocation sales numbers in the mix as soon as they open.
But some big rivals see it differently. Walgreen Co., CVS Inc. and Wal-Mart Stores Inc. say they don't include relocated units in their same-store-sales comparisons until the units have been open a full year. Rite Aid Corp. does count relocated units in its same-store sales, though with about 10 relocations a year in the 3,400-store chain, there is limited impact.
The thinking of Walgreen and the others: Stores that have been relocated, even if they move just a few blocks away, tend to behave as though they are new stores because they are larger, have more visibility and frequently have newer features, such as drive-through windows. Sales tend to jump about 30% over the store that was replaced, according to retail-industry figures. Eckerd says its sales increases are even higher.
Stephen Hoch, a marketing professor at the Wharton School of the University of Pennsylvania in Philadelphia, says, "All retailers should be playing by the same rules when determining sales momentum or the comparisons are skewed."
Eckerd, whose relocated stores will be about 25% larger than the old ones, could use a quick boost to its numbers. It has trailed rivals for the past several years in same-store-sales growth of prescription drugs and front-of-the store merchandise, such as toothpaste and toilet paper.
Between February and May, Eckerd's same-store sales fell 1%, compared with an 8.1% increase at Walgreen, a 4.5% jump at CVS and a 4% rise at Rite Aid, Camp Hill, Pa. Eckerd said its May same-store sales declined 3.5%.
Including results immediately from relocated stores in same-store sales calculations could lift Eckerd's same-stores sales by one to 1.5 percentage points later this year.
"I'm not happy that Eckerd's same-store-sales gain has lagged the drugstore-industry average for months now, and they've given every excuse in the book," says Robert Buchanan, retail analyst at A.G. Edwards & Sons, St. Louis. "At some point they need to start putting up better numbers, but the right comparison has to be apples to apples."
In 2002, Eckerd contributed $14 billion of Penney's $32 billion in revenue and about 37% of Penney's net profit of $405 million. After six consecutive quarters of net-income growth, Penney's and Eckerd's turnaround efforts stalled, as sagging sales at both units led to a 29% decline in first-quarter earnings from a year earlier. The sales slump led a series of stock selloffs. In 4 p.m. New York Stock Exchange composite trading, shares of J.C. Penney, Plano, Texas, fell 18 cents to $16.85 each, from a 52-week high of $22.50 Dec. 2.
At Wal-Mart, depending on when its relocated stores open, some sales results won't show up for 23 months, says Tom Williams, a spokesman for the Bentonville, Ark., company. "In essence we treat them as new stores because they're larger, so they're a whole new comparison," he says.
Walgreen, CVS and Wal-Mart each plan to relocate more than 100 stores this year.
"Typically, sales volume increases so much that we don't feel including relos in our same-store sales gives an accurate view of comparable-store base," says Carol Hively, spokeswoman for Walgreen of Deerfield, Ill., the country's largest drugstore chain based on sales.
The gap between No. 4 Eckerd and Walgreen and No. 2 CVS, Woonsocket, R.I., has widened even further during the past year, despite Eckerd's efforts to lower prices, improve computer systems and enhance store layouts.
In addition to the relocations, Eckerd aims by year end to open 150 stores. Mr. Harris says the company's weak performance reflects the rapid expansion of Walgreen and CVS.
In a May report, Goldman Sachs Group Inc. said Eckerd's expansion could increase the chain's expenses and cannibalize existing-store sales. Goldman, New York, downgraded its rating on Penney stock to "underperform." Goldman has blamed execution, not a lack of expansion, as the root of Eckerd's problems. Goldman analysts George Strachan and John Heinbockel suggest Eckerd's sales problems stem from high prices, among other things.
In a survey of 46 items in Orlando, Fla., for instance, Goldman found that Eckerd's prices were 8% higher than those at Walgreen. Goldman, which expects to receive or intends to seek investment-banking compensation from J.C. Penney, declined to comment on the same-store-sales methodology.
Eckerd真的寻到了良药吗？
Eckerd Drug Stores的高级管理人员认为他们已找到了用于改善公司同店销售额的一剂良方。但这并未怎么打动零售业内的一些专业人士。同店销售额作为衡量持续经营业务的指标受到密切关注。
当子公司J.C. Penney Co.最近宣布将迁址，并对其2,686家连锁店中的约100家进行扩建时，Eckerd的首席执行长Wayne Harris对分析师称，他预计此举最早将从下半年开始给同店销售带来提振。然而，同店销售额通常被用来跟踪开业至少一年的店铺的活动。
Eckerd说，将迁址和扩建的店铺即刻纳入公司同店销售数据是被允许的。Harris称，多数食品和药品零售商从迁址店铺一开业起便将该店铺的销售额纳入同店销售额中，这是一个得到普遍接受的方式。
但该公司一些大的竞争对手则有不同的看法。Walgreen Co.、CVS Inc.和沃尔玛(Wal-Mart Stores Inc.)称，他们在迁址店铺开业满一年之前不会将其销售额纳入同店销售数据。Rite Aid Corp.未将迁址店铺计入同店销售数据中，尽管该公司的3,400家连锁店铺中每年约有10个店铺迁址，但这对同店销售额的影响却有限。
Walgreen和其他零售商的看法是：搬迁的店铺，即使仅迁移了几个街区的距离，其运作也同新店一样，因他们的面积更大、有更强的可见性，且经常有更新的特色，如专为过往车辆提供的服务窗口。据零售业的数据显示，店铺搬迁后的销售额通常会飙升30%左右。
宾夕法尼亚大学沃顿商学院市场营销学教授Stephen Hoch称，所有的零售商在确定销售动能时都应该是以相同规则运作，否则数据的比较结果将是被扭曲了的。
Eckerd旗下搬迁店铺的规模较迁址前扩大了25%左右。该公司过去几年对竞争对手的处方药以及牙膏、卫生纸等处方药以外商品的同店销售增长作了跟踪。
2至5月份期间，Eckerd的同店销售额下降了1%，而Walgreen的同店销售增长了8.1%，CVS的增幅为4.5%，Rite Aid的增幅为4%。Eckerd称其5月份同店销售额下降了3.5%。
将搬迁店铺的数据即刻计入同店销售数据可能会使Eckerd今年晚些时候的同店销售额增加1至1.5个百分点。
A.G. Edwards & Sons的零售业分析师Robert Buchanan称，他对Eckerd的同店销售额增幅连续数月落后于药店业平均水平感到不快。他们在报表中给出了各种借口。在某种程度上，他们需要著手提供更好的数据，但数字的比较必须合理。
沃尔玛的发言人Tom Williams说，在该公司，搬迁店铺的销售业绩在开业23个月内不会公布。实质上，公司将这些店铺作为新店对待，因这些店铺的规模扩大了，因此他们成为一个全新的比较对象。 Walgreen、CVS和沃尔玛各自计划今年搬迁逾100家店铺。
Walgreen的发言人Carol Hively称，通常，销售量的增幅太大，以致于他们认为把搬迁店铺计入同店销售数据无助于使人正确看待同店销售额。
排名第四的Eckerd与排名第二的CVS之间的差距去年进一步扩大，尽管Eckerd采取了下调价格、升级电脑系统以及改善店面布局等措施。
除了搬迁店铺外，Eckerd还计划争取在年底前新开150家店铺。Harris说，公司疲软的业绩反映出Walgreen和CVS的迅速扩张。
高盛(Goldman Sachs Group Inc.)在5月份的一篇报告中称，Eckerd的扩张可能会增大其支出，并会吞噬现有店铺的销售额。高盛将Penney股票的评级下调至弱于大盘。高盛将Eckerd问题的根源归结为执行问题，而非扩张不足。高盛分析师George Strachan和John Heinbockel指出，Eckerd的销售问题主要缘自高价格。
高盛在对佛罗里达州奥兰多的46个项目所作的一项调查中发现，Eckerd的价格较Walgreen高出8%。预计将从J.C. Penney处获得或寻求获得投资银行业务报酬的高盛拒绝就同店销售额的统计方法发表评论。
