Walgreens Fueled by Private Label Sales

BioInfusion and other store brands provided a lot of life to Walgreens’ Q4 earnings, it was announced this week by the retailer.

Private label sales shot up by 15% compared to last year, the company said. The figure includes both products sold and marketed under the Walgreens label and “captive” brands like bioInfusion, which carry no evidence of the retailer’s affiliation.

While the company did not break out private label sales in dollars, Walgreens was on track with analysts’ predictions of 45 cents per earnings share. Net Q4 earnings rose to $443 million, compared to $397 million for the same quarter a year ago.

“You look at numbers like [the 15% boost]. Will there be more of that? The answer is ‘yes.’ It can help drive the entire chain,” said Paul Kurnit, marketing professor at Pace University, New York.

Private label’s strength results from a combination of factors: The company’s focus on packaging, smarter marketing strategies, the economic downturn and consumers’ need for shopping convenience, per Walgreens rep Tiffani Bruce. “We’ve done consumer focus group testing on most of our brands and [respondents] say we offer just as good quality or better than the national brand,” she said.

While retailers typically don’t spend much to market store brands, Walgreens has devoted national print ads to bioInfusion and others in consumer magazines like Allure and Essence. Downtown Partners, Chicago, is the company’s lead agency.

Walgreens named its new CMO, Kim Feil