CVS 1998 Annual Report Download - page 12

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Thanksgiving and Christmas. Through the promo-
tion of this limited edition, we created a special
“buzz” in our stores throughout the holidays.
Our CVS brand merchandise has also proven
to be a major draw for customers. By offering high-
quality products at excellent prices, the CVS brand
continues to be extremely successful, posting
double-digit sales increases. As part of our expan-
sion, we recently added CVS brand herbal and
natural supplements to enhance our line of private
label vitamins, a fast-growing category. We also
continue to expand our line of successful CVS
Gold Emblem®convenience food
products. The Gold Emblem
name signifies our com-
mitment to superior
quality and exceptional
value.
Just as in our
pharmacy business,
investments in
technology have played a valuable role in optimiz-
ing our front-store performance. One of our most
important programs is our multi-year supply chain
initiative. This multi-year initiative will totally
transform the way we receive, distribute and sell
merchandise in the future. It is helping us improve
our in-stock positions as well as our sell-throughs
of promotional and seasonal merchandise. The first
two phases of this initiative focused on making
improvements in our category management system
and in maximizing gross profit through price elas-
ticity and promotional allocations. During the third
phase, we are launching a merchandise transaction
system that will help us more effectively tailor our
product mix for specific markets, an increasingly
important part of our strategy. Based on test pro-
grams, we believe there is a significant opportunity
to further increase front-store sales through
“micromerchandising” initiatives that enable us to
better respond to the particular needs and tastes of
customers in local markets.
In total, it is our superior knowledge of our
customers’ needs and our endless search for better
Care about customers
10
CVS provides value to customers by offering unique
products and services. Our launch of Ultima II
cosmetics, formerly only available in department
stores, was very well received.
One-hour photo labs are just one of the ways we offer
value to our customers. We plan to have one-hour labs
in 2000 stores by year-end 1999.