Inside This Issue - News
‘Health, daily living’ focal point of Walgreens stores
November 22nd, 2010
CHICAGO – Walgreen Co. is ideally positioned for “the retailization of health care,” president and chief executive officer Greg Wasson said at the company’s Analyst Day conference.
Patients are turning into shoppers when it comes to their care, he said, and Walgreens is at the intersection of the retail and health care industries. To fully capitalize on the trend, the chain is evolving into an operator of “health and daily living” stores, he added.
“We want to own ‘well,’ ” Wasson said, explaining that Walgreens will focus on prevention and management of chronic disease. “No one is better positioned to execute this strategy, as every day we provide nearly 6 million people with convenient access to health and daily living goods and services in communities across the country. Two years into one of the greatest strategic and operational transformations in our history, Walgreens is laser-focused on executing the key initiatives that will bring our strategy to life while creating shareholder value.”
Walgreens is accelerating its “plan to win” through three core strategies: leveraging its drug store network, enhancing the customer experience, and cutting costs and boosting productivity, Wasson said.
A slowdown in new store openings enabled the retailer to acquire more stores in the last two years than at any time in its history. As a result, the company has the No. 1 or No. 2 market share in 226 metropolitan areas, including New York City, Wasson noted.
The chain slowed the pace of new store openings from 9% in 2008 to 4.2% in the fiscal year ended August 31, and expects growth of 2.5% to 3% in the current fiscal year. But despite scaling back, it is still debuting more stores than all of its competitors combined, Wasson said.
Walgreens’ pharmacy market share has grown to 19.5% from 18.2% in 2008. The company filled a record 778 million prescriptions in fiscal 2010, up 15% from 2008.
Walgreens president of community management Mark Wagner said the store base was “decades in the making.” With 63% of the U.S. population living within three miles of a Walgreens, “we are truly ‘My Walgreens’ to millions of Americans, their first choice for health and daily living needs,” he said.
President of pharmacy services Kermit Crawford said the company is freeing up pharmacists for patient care by taking away their responsibilities for administrative tasks. “We also are expanding our scope of services to ensure our highly trained pharmacists are viewed as a key link in the prevention and screening of chronic disease,” he said.
In the productivity arena, Walgreens’ Rewiring for Growth initiative is on track to meet its goal of $1 billion in savings in fiscal 2011. “Just as important, we are embedding continuous process improvement and innovation into the fabric of our company,” said executive vice president and chief financial officer Wade Miquelon.
Wasson noted that since launching its Customer-Centric Retailing initiative in 2008 the company will have converted more than 2,000 drug stores to the format by the end of 2010. It plans to finish the rollout of a total of 5,500 stores by the end of next year.
The company has grown into a leading multichannel retailer in the last two years, he added, with the relaunch of Walgreens.com and a more than 50% increase in traffic to the site since 2008. The company also added smartphone apps and a new mobile web site, and it offers text messaging to alert pharmacy customers when their prescriptions are ready for pickup.
The chain has created the largest retail network of certified immunizers, with more than 27,000 pharmacists and clinicians providing flu shots and other immunizations in what Wasson said is a nearly $40 billion market. Walgreens’ flu shot program has grown from providing 1.2 million shots in 2008 to more than 7 million last year. The company anticipates providing even more shots during the current flu season.
Walgreens is the No. 1 provider of infusion pharmacy services in the country and is expanding its offering with its announcement in September of the purchase of substantially all of the assets of Omnicare Inc.’s home infusion business.
The company is also broadening and deepening its relationships with health care payers. Walgreens this year realigned its health care services and restructured its client service and sales organization to provide payers with a seamless pharmacy, health and wellness solution.
“We are the nation’s leading full-service pharmacy provider — not a doubt,” Wasson said.
He also praised the management team assembled over the past two years, saying it is “a perfect blend of external and internal talent” that is hitting its stride.