ATLANTA (Reuters) - Retailer Kmart, looking to lift sales as the slowing U.S. economy hurts traffic, is planning to offer aspirin and other common medications made under its private label brand for $1 with the purchase of new or refilled prescriptions at its stores.
Kmart, a unit of Sears Holdings Corp (SHLD.O), said that the program is launching in Florida this month and will spread to other states in April.
The program will initially include 10 over-the-counter drugs sold under Kmart’s American Fare brand, but that number could increase in the future, the company said.
Medications in the program include ibuprofen, children’s pain reliever, nasal decongestant, cough suppressant and cold and allergy tablets. The retail price of the 10 products in the program ranges from $1.49 to $4.49.
“We’re not aware of anyone else that’s doing this so we really do think it’s innovative,” Mark Doerr, vice president of Kmart Pharmacy, told Reuters in an interview.
Kmart is seeking to boost sales as its parent company restructures operations in a bid to improve financial results.
Sears Holdings, controlled by hedge fund manager Edward Lampert, posted a 47.5 percent decline in quarterly profit last week. Sales at stores open at least a year have fallen for the past two years at both its Kmart and Sears, Roebuck chains.
Earlier this year, the Hoffman Estates, Illinois, retailer said it would reorganize into five types of business units: operating, support, online, real estate and brand. The company is also searching for a permanent chief executive.
Programs offering discounted prices for drugs have proliferated since Wal-Mart Stores Inc (WMT.N) began offering widely used generic prescriptions for $4 in 2006. Since then, retailers including grocery stores have moved to offer lower-cost generic drugs.
Kmart, which has more than 1,100 U.S. pharmacies, began providing a three-month supply of common generic drugs for $15 in 2006, and said that program has had “dramatic” response.
“We’ve seen improved persistency on medications,” as customers continue to refill prescriptions under the 90-day generics program, Doerr said.
He said expansion in generic programs would be fueled as patents expire for brand-name drugs. “Potentially as blockbuster brands start to go generic, those items can also be put on,” he said.
Sears Holdings shares were down $1.76, or 1.9 percent, to $91.73 in afternoon Nasdaq trading. The shares have risen 8 percent from a year-low of $84.72 in January, but are down 53 percent from a high of $195.18 in April 2007.
Reporting by Karen Jacobs, Editing by Gerald E. McCormick