Same-Store Sales: Drugstores, Supermarkets, Fast Food Weathering Recession

May 5, 2009

This article is included in these additional categories:

Analytics, Automated & MarTech | CPG & FMCG | Financial Services | Retail & E-Commerce

Same-store sales data from more than 24 major US retailers indicate that the drugstore vertical is improving its performance, the fast-food industry continues to do well, and the larger supermarket chains are, in general, poised to ride out the recession.

The data has been compiled by Retailer Daily from SEC filings spanning several years, up to and including the most recently released March numbers. Data exclude fuel sales (which would have distorted numbers because of high gas inflation, then deflation, in 2008.

Highlights from key industries are listed below.


  • Rite Aid reported a 1.8% increase in April, compared with a 0.1% decline in March.
  • Walgreen’s, reported an 11% gain in April, compared with a 1.5% gain in March.
  • CVS, which has not yet released February or March 2009 same-store sales figures, reported a 3.6% gain in January.


According to Retailer Daily, same-store sales have been generally improving this year in the drugstore vertical, with Rite Aid turning a small decline into a gain in April and Walgreens going from small gain in March to a substantial gain in April.? Walgreens’ superior same-store sales performance reflects recent financial trends with both retailers.

Rite Aid recently reported net losses for Q4 and fiscal 2008, although annual revenues did increase. During fiscal 2009, Rite Aid predicts flat revenues and a same-store sales increase of 0.5-2.5%, as well as continuing net losses. In the wake of its 2008 net losses, Rite Aid plans to close 117 stores across the U.S. this year, as well as two distribution centers. Closing of underperforming stores may reduce cannibalization and further improve same-store sales at remaining Rite Aid locations.

By comparison, Walgreens recently reported record sales of $16.5 billion for Q2 2009, although internal costs contributed to a decrease in net earnings. Walgreens also recently purchased stores from both Rite Aid and Drug Fair, and is trying to bring in new customers by offering free medical services to uninsured consumers at its in-store Take Care clinics during 2009.


Supermarket retailer Supervalu reported a 0.5% same-store sales drop in April, and recently reported annual net losses due to non-cash impairments, Retailer Daily said.? Supervalu did post slightly higher annual net sales.

Unlike most retailers, supermarkets offer a product that is vital for survival and must be purchased on an ongoing basis. While some smaller regional supermarket chains have declared bankruptcy this year, it appears that larger supermarket operators such as Supervalu are positioned to ride out the current recession. One potential threat to large supermarket chains is the increasing entry of discount and convenience retailers into the grocery vertical.

Fast Food:

  • McDonald’s reported a 4.7% increase in Q109.
  • Burger King reported a 1.6% increase in Q309 (January – March).

The fast-food vertical continues its strong performance during difficult economic times as consumers seek convenience and low prices above all else. Both McDonald’s and Burger King are trying to capitalize on increased consumer demand for fast food with a variety of new menu items and promotional activities. McDonald’s is expanding its beverage assortment and also piloting in-store cafes in both the US and Canada, while Burger King is tinkering with 45 new menu items and new restaurant concepts such as the cafe-style Whopper Bar, Retailer Daily said.

McDonald’s reported increased consolidated comparable store sales and net income during Q109. Burger King reported increased revenues, consolidated store sales, and net income for its fiscal Q309 (ended March 31, 2009).

The complete data set for all stores tracked – up to and including March 2009 -? is available in Excel format and can be downloaded from the link below:


Factors Influencing Same-Store Sales

According to Retailer Daily, same-store sales are influenced by various factors, including the number of days in the observed periods, the timing of holidays, regional variations because of local economic conditions, or weather incidents. For instance,? the timing of Easter made March look worse in 2008 and April look better than in 2007.

Sales for existing stores typically reflect a combination of (a) the robustness of consumer consumption in their individual trading areas and (b) the local standing and competitiveness of each store within its trading area. Among other criteria, retailers look at average order size multiplied by the number of transactions during the period to identify sources of revenue growth per store. Growth might, for instance, be driven by a more expensive product mix if, say, a retailer started successfully upselling higher-end products to its customers.

Another issue affecting same-store sales is trading-area saturation, whether because of competitive pressure or self-inflicted causes. Home Depot, for instance, stated in a recent SEC filing that it opened stores “near market areas served by existing stores (‘cannibalize’) to enhance service levels, gain incremental sales and increase market penetration…. [N]ew stores cannibalized approximately 9% of our existing stores as of the second quarter of fiscal 2008, which had a negative impact to comparable store sales of approximately 1%.”

Declining same-store sales can increase the weight of selling, general and administrative expenses (SG&A) as a percentage of sales. For instance, Home Depot said in 2008 that its “deleverage in SG&A reflects the impact of negative comparable store sales, where for every one percentage point of negative comparable store sales, we expect to deleverage expenses by about 20 basis points.”

Also, Mapping of the 155 stores closed by Circuit City in November 2008 shows that overlap in some markets probably contributed to under-performance there. If the current recession lasts, it is quite likely that retail density will decrease with more store closures in areas showing the most overlap, the analysis showed.

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