Hurricane Irene, inflation to drive August comps
NEW YORK — By the time sales figures for August are tallied, last week's Hurricane Irene may have flooded more than the East Coast seaboard; she may have flooded pharmacy registers, too.
"Inflation and Irene likely drove strong front-end comps in August," Credit Suisse equity analyst Edward Kelly wrote in a note published Monday. "Our most recent monthly Nielsen Trend Tracker for the four-week period ended Aug. 6 … shows that industry sales remain strong, driven by accelerating price inflation as drug stores pass through vendor price increases and positive volume growth," he suggested. "East Coast drug stores also likely experienced heavy traffic in preparation for Hurricane Irene."
According to Credit Suisse estimates, any sales push driven by hurricane preparation would benefit Rite Aid the most with an estimated 35% of its store base in those areas impacted by Hurricane Irene, followed by CVS (25%) and Walgreens (15%).
Credit Suisse projected Rite Aid June front-end same-store sales to be up as much as 3.5% and Walgreens up 5%. Rite Aid and Walgreens report August sales on Sept. 1 and Sept. 6, respectively.