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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (35681)	10/12/2009 4:27:10 PM
From: E_K_S	Read Replies (1) \| Respond to of 78705

RE: WMT I am not too sure of the % of sales WMT does in their Pharmacy department, but I bet that they show a double digit increase in revenues if they had a quarter like WAG. WAG was up over 10% earlier this month when their same store sales numbers were released. Walgreens September Sales Increase 10.3 Percent finance.yahoo.com From the article:"...September pharmacy sales increased 11.2 percent, while comparable pharmacy sales increased 7.0 percent. Comparable pharmacy sales were positively impacted by 2.4 percentage points due to seasonal flu shots, and negatively impacted by 2.3 percentage points due to generic drug introductions in the last 12 months. Prescriptions filled at comparable stores increased 12.0 percent in September, including 5.2 percentage points due to seasonal flu shots and 1.4 percentage points due to more patients filling 90-day prescriptions. Pharmacy sales accounted for 67.6 percent of total sales for the month...." The new drug prices seem to benefit both Wal-Mart & Wallgreens. sptimes.com "...Discounters like Wal-Mart account for about 20 percent of the prescription drug market, with major retail drug chains accounting for about 40 percent. Ransom said the biggest likely losers to Wal-Mart's gambit are other discounters like Costco...." "...That's what the folks at Walgreens, the nation's largest drug retailer, are hoping. The Deerfield, Ill., chain filled over 500-million prescriptions last year, about 60 percent of which were generic; 95 percent of their prescription customers had insurance. Michael Polzin, Walgreens' spokesman, said the chain has no intention of matching Wal-Mart's $4 price..." ============================================================== WMT's pharmacy has a host of prescription drugs that they sell at a flat rate of $10.00 for a 3 month subscription. They even beat Kaiser's drug benefit plan for all of the common generic brands. WMT even does Flu shots. They provide a Flu Shot locator here: flushotsusa.walmart.com Mollen Immunization Clinics, LLC is contracted by Wall Mart to provide Flu Shots. It looks like Mollen is a private company. EKS

To: Spekulatius who wrote (35681)	10/12/2009 4:41:36 PM
From: Tapcon	Respond to of 78705

WMT will just raise their prices. Demand schedule WMT faces slopes downward, not vertical. WMT will raise prices, but margins will be squeezed, quantity sold will be lower as one moves up the demand curve. (Higher costs shift price-quantity supply schedule to the left.) Where else will their customers go to get a better deal? Perhaps nowhere. But that doesn't mean consumers will be able to afford higher prices and consume same or higher quantities. I agree that WMT mgmt will likely cope better with price increases than their competitors. But unless the bet is expanding market share will compensate for the negatives, WMT is facing higher costs they cannot easily overcome...in theory.