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Валгрин Ко. Message Board

  • cc43578 cc43578 Sep 13, 2013 9:43 AM Flag

    "Walgreen is Eating Rite Aid's Lunch"

    "Walgreen's return to a more promotional stance is starting to damage smaller rival Rite Aid (NYSE: RAD ) . A price war plays to Walgreen's strength as the largest drugstore chain in the country, while it could further undermine Rite Aid's already-meager profit margin."

    "While Rite Aid was the biggest beneficiary of the Walgreen-Express Scripts dispute last year, it's now losing market share to Walgreen once again. Whereas Walgreen reported a 6.8% jump in comparable-store prescription count for the August quarter, the same measure was flat at Rite Aid.

    This loss of prescription market share has afflicted Rite Aid for many months now. However, the company is now starting to feel pressure from Walgreen's front-end price initiatives as well.

    In June, Rite Aid's front-end comparable store sales grew 0.4%, in-line with the company's trend for this year. In July, this figure ticked up by 30 basis points sequentially to 0.7%, whereas Walgreen saw a much stronger 150-basis-point sequential improvement. Most disturbingly, whereas Walgreen's comparable-store front-end sales growth remained above 2% in August, Rite Aid last week reported a 1.7% drop in that measure for August."