CAMP HILL, Pa. — What Rite Aid might wish for Christmas is accelerated results borne from its Wellness+ loyalty card program, because even as the chain lowered its guidance for fiscal 2011 sales, it’s that differentiated loyalty program that’s going to buttress sales next year and beyond.
Based on its third-quarter results and its lower expectation for same-store sales in the fourth quarter, Rite Aid lowered its fiscal 2011 guidance for sales and adjusted EBITDA, and increased fiscal 2011 guidance for net loss. Sales now are expected to be between $25 billion and $25.2 billion, with same-store sales expected to range from a decrease of 1.5% to a decrease of 0.9%. Net loss is expected to fall between $655 million, or 74 cents per diluted share, and $525 million, or 60 cents per diluted share.
Even with the lowered guidance, Rite Aid was bullish regarding its Wellness+ program. “[Wellness+] helped fuel a significant turnaround in front-end sales,” John Standley, Rite Aid president and CEO, told analysts Thursday morning during the chain’s third-quarter conference call. “We continue to exceed our enrollment [projections] in Wellness+,” he said.
In the first eight months of the program, more than 29 million customers have opted into a loyalty program that successfully connects the pharmacy business with the front end. Through the first two weeks of December, 70% of front-end sales were connected to a loyal consumer, and 50% of pharmacy sales were transacted with a Wellness+ card. Excluding New York and New Jersey (two states that don’t allow loyalty programs to accumulate points for prescriptions filled), 64% of prescriptions were filled by patients enrolled in the Wellness+ program.
Total market basket of those Wellness+ customers is 50% higher than Rite Aid’s transient customers, versus 40% higher as of the last quarter, Standley said. And while much of the impact of Wellness+ to date has been connected to helping front-end sales, the program bodes well for the back end, too. “As Wellness+ matures, it will help us grow script counts,” Standley said. “Wellness+ retains and attracts good pharmacy customers.”
Other positive initiatives to come out of Rite Aid’s conference call with analysts included its focus on growing its flu vaccine business, its partnership