CHAINS and BUSINESS

Red, white, and blue ... and green?

It's beginning to look a lot like a decent holiday season. Despite the steep decline in shopping activity in the days immediately following the Sept. 11 tragedy, two new surveys show that pharmacy owners have good reason to be optimistic.

One survey, conducted by the International Mass Retail Association in late October, showed that shoppers plan to spend 4.4% more on their holiday gifts this year than last. Consumers plan to spend an average of $863 per household, up from $828 in 2000.

According to the National Retail Federation's (NRF) 2001 Consumer Holiday Outlook survey, consumers plan to spend an average of $940 per household this holiday season on gifts for family and friends, decorations, greeting cards, and food or candy. Noting that this is the first time NRF has conducted a holiday survey, a spokesman said, "We expect sales to be up 2.5%-3% from last year."

Given America's need to show its patriotism, gifts of red, white, and blue will likely find their way under Christmas trees this holiday season. As Mark Griffin, president/CEO of Lewis Drugs, Sioux Falls, S.D., explained to Drug Topics, "What's different about this Christmas? It's going to be a show-your-flag Christmas. The public needs to show its patriotism, and it's a need that we fulfill because we sell and promote patriotic items, whether they are flags or pins."

Lewis Drugs has a soft goods business that features designer labels such as Polo Ralph Lauren. The chain expects clothing, such as T-shirts emblazoned with flags, to be bestsellers. "In terms of the rest of the products, it's going to be a conservative, practical, nesting Christmas," said Griffin. "People are going to feel more comfortable spending money enhancing their homes and their home life; unfortunately, it will be at the expense of travel." He hopes boxed cards and new tube lighting will sell well. "Do people feel like decorating? We hope they do," he said.

Griffin sized up the coming holiday season this way, "I'm cautiously optimistic. You plan for maybe not the best and hope for the best. We are ready with a quick response for any opportunities that pop up."

Gerald Heller, president/CEO at May's Drug Stores, Tulsa, Okla., echoed Griffin's feelings that Christmas 2001 will be patriotic. "Flag items are selling like crazy. We just received our flag pins a week ago, and we're selling hundreds of them every day. We've had T-shirts with flags on them. We had red, white, and blue flowers that have come in that have sold. Anything with a patriotic motif is just blowing out of stores. Eventually, that will slow down, but right now, nobody seems to be able to get enough of it," he exclaimed.

Although Heller doesn't think holiday sales will sizzle this year, they should be respectable. "People tend to want to celebrate a holiday like Christmas. Sometimes when things are bad, it's actually good for the drugstore business because our price points are more low-end in the marketplace—certainly not the highest."

What items does Heller think will sell well? He said Homedics' lighted bubble sphere priced at $20 is expected to be a hot item, as are the heated paraffin wax units in the $20-to-$30 range. He is also betting that imported novelty gift items in the $5-to-$10 range will fly out the door. He expects trim-a-tree, new bubble lights, lower-priced novelties, and plush merchandise to be scooped up by Santa.

Alan Levin, chairman/president/CEO of Happy Harry's, Newark, Del., predicts it will be a good Christmas season for drugstores. "People will want to celebrate this year. But after the events of Sept. 11 and looking at the economy, their enthusiasm will be somewhat tempered, so while they'll want to celebrate, they will do it in a basic manner. They will buy smaller gifts, and that will bode well for the drugstore industry."

Deerfield, Ill.-based Walgreens is also "very optimistic about the holiday selling season," according to Michael Polzin, corporate spokesman for the chain. "We have traditionally done very well in holiday seasons during tough economic times. People don't skip Christmas. They may buy less expensive items, but they don't skip Christmas," he said. Noting that Walgreens started decorating on Nov. 1, Polzin said, "Patriotic items weren't in our original merchandising plan. Since Sept. 11 we've been carrying patriotic items, and they've sold very well."

At Bauder Pharmacy in Des Moines, owner Mark Graziano, R.Ph., also foresees a patriotic Christmas. He's been selling flag stickers and decals and believes consumers will purchase these items for gift giving. Although he thinks the Christmas selling season will be quieter this year, Graziano, who traditionally goes gung-ho decorating the store, with more than 100 animated pieces, is going full-steam ahead. "We're not cutting back at all. In fact, we got 50 or 60 new animated pieces in the other day," he said enthusiastically.

Sandra Levy

Sandra Levy. Red, white, and blue...and green?.

Drug Topics

2001;23:42.