Rite Aid 2014 Annual Report Download - page 28

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Revenues
Fiscal 2014 compared to Fiscal 2013: The 0.5% increase in revenue was due primarily to an
increase in pharmacy same store sales, partially offset by a decrease in front end sales. The increase in
pharmacy same stores sales was driven primarily by brand drug inflation, partially offset by a decrease
in same store prescription count, negative impact from generic introductions and continued
reimbursement rate pressures. We expect lower reimbursement rates to continue to have a negative
impact on our revenues. Same store sales trends for fiscal 2014 and fiscal 2013 are described in the
following paragraphs. We include in same store sales all stores that have been open at least one year.
Stores in liquidation are considered closed. Relocation stores are not included in same store sales until
one year has lapsed.
Pharmacy same store sales increased 1.2%. Pharmacy same store sales were positively impacted by
brand drug inflation. The increases were partially offset by a decrease of 0.3% in same store
prescription count and the continued impact of generic drug introductions, which have a substantially
lower selling price than their brand counterparts but higher gross profit. Pharmacy same store sales
were also negatively impacted by continued reimbursement rate pressures.
Front end same store sales decreased 0.2%. The decrease in same store front end sales was
impacted by consumer spending habits and the heavy promotional environment, partially offset by the
positive impact of our wellness + loyalty program, incremental sales from our Wellness format stores,
and other management initiatives to increase front end sales. Active wellness + members, defined as
those who have used their cards at least twice during the last twenty-six weeks, was nearly 25 million as
of March 1, 2014. We have completed over 1,200 Wellness store remodels as of March 1, 2014.
Fiscal 2013 compared to Fiscal 2012: The 2.8% decrease in revenue was due primarily to one less
week in fiscal 2013 and a decrease in same store sales. The decrease in same stores sales was driven
primarily by generic introductions and continued reimbursement rate pressures, partially offset by
increased same store prescription count, the positive impact of our wellness + loyalty program, and
other management initiatives to increase sales. The increase in same store prescription count was
driven in part by the Walgreens / Express Scripts dispute which was settled in September 2012, our
immunization program and our wellness + loyalty program.
Pharmacy same store sales decreased 1.0%. Pharmacy same store sales were negatively impacted
by generic drug introductions and lower reimbursement rates. These decreases were partially offset by
an increase of 3.4% in same store prescription count driven in part by incremental prescriptions gained
from the Walgreens / Express Scripts dispute and by our immunization program and wellness + loyalty
program.
Front end same store sales increased 1.4%. The increase in front end same store sales reflects the
positive impact of our wellness + loyalty program, incremental sales from our Wellness format stores,
and other management initiatives to increase front end sales.
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