CVS 2003 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2003 CVS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 52

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52

(2)
REAPING THE BENEFITS Through our “CVS easy” initiatives, we’ve worked hard to make ours the easiest stores to shop among all
OF “CVS EASY”drug retailers. Take our Pharmacy Service Initiative, which we rolled out during the year. Based on tracking
studies, we have seen substantial improvements in service levels and have received overwhelmingly
positive customer feedback. Our ExtraCare®program, with more than 44 million cardholders, is the largest
and most successful U.S. retail loyalty program. Three years after ExtraCare’s rollout, cardholders account
for a remarkable 55 percent of all transactions and are enjoying the program’s many benefits.
Assisted Inventory Management (AIM), the computerized inventory tracking system we introduced in 2002,
has dramatically improved our in-stock position in the front of the store. AIM helped us exceed our inventory-
turn goal in 2003, making us the leader among national drugstore chains in this important productivity
measure. We achieved inventory turns of 5.0 times for the year, up from 4.6 times in 2002. Furthermore,
we rolled out AIM for the pharmacy in 2003 and anticipate substantial benefits as 2004 progresses.
In July 2003, CVS also became the first national drug retailer to offer self-service digital photo printing.
Customers have noted their approval of our easy-to-use kiosks by printing more than 25 million images
through year-end. This has reversed the downward trend in the overall photo category caused by the drop
in traditional overnight processing.
Our “CVS easy” mission even drives the way we design our stores, with a focus on enabling customers
to get what they want as conveniently as possible. They appreciate our more than 1,700 drive-thru
pharmacies, carpeted floors, good lighting, and five-foot shelf heights that make it easy to find and reach
every product. We’ve expanded store hours as well, with 1,600 stores—double last year’s level—now
offering 24- or extended-hour service. This strategy is paying off. CVS boasts the highest sales per retail
square foot of any national drugstore chain, hitting more than $800 in 2003. More than 50 percent of our
stores were freestanding at the end of 2003, and we expect that figure to reach 70–80 percent over the
long term. On the pages that follow this letter, I invite you to witness “CVS easy” in action.
’99 ’00 ’01 ’02 ’03
18.1
20.1
22.2
24.2
26.6
Sales (In billions of dollars
)
ExtraCare Cardholders (In millions
)
’99 ’00 ’01 ’02 ’03
Test Begins
1.9 Pilot Begins
25.8 Chainwide
34.3
44.4
Forty percent of
all U.S. households
participate in the
CVS ExtraCare
loyalty program.