DEERFIELD, Ill. — The editors of Chain Drug Review have named Greg Wasson, president and chief executive officer of Walgreen Co., the publication’s 2009 Chain Drug Retailer of the Year.

Wasson has earned the distinction for no less an accomplishment than reinventing America’s most revered drug chain, one that until recently had earned its reverential status by the simple expedient of opening more drug stores each year than any competitor and so assuring a strong sales and earnings performance. When this strategy proved insufficient to drive Walgreens’ business in a difficult economic climate, earnings took a perilous downturn — and Wasson was named the retailer’s CEO.

In the year since his appointment, nearly half of the drug chain’s senior managers have changed, and that’s just the beginning. Wasson has created several new senior-level positions, defined and executed a brand-oriented strategy designed to replace the formula that relied on opening stores to produce sales with a more permanent and sustainable customer-centric strategy, initiated programs designed to increase productivity and drive customers into the Walgreens drug stores, and launched a program to put the retailer’s pharmacists in closer contact to the patients they serve.

Behind this diverse group of initiatives is a simple premise — positioning Walgreens to capitalize on the simple but inarguable premise that its drug stores are more conveniently located than any drug stores in America.

It has, in short, been a remarkable year — and a remarkable performance — one that has set the drug chain on a path that will end with Walgreens’ reemergence as the community pharmacy leader in America.

“What we’re attempting is simple,” Wasson says. “We’re looking to get more productivity from our core business by capitalizing on the fact that we are the most convenient provider of pharmacy and related health and wellness products and services in America.

“We have therefore made a decision to slow store growth while focusing more closely on the 7,000 drug stores we now operate. We’re positioning those drug stores to deliver more value by enhancing the customer experience across the store.”

To do so, Walgreens is currently rolling out its groundbreaking Customer-Centric Retailing program. It is now in place in all 400 stores in Dallas and Houston as well as in some 50 strategically located Walgreens outlets in markets across the United States. As Wasson explains, the program, which has the retailer reducing its item count by some 4,000 SKUs, with particular emphasis on reducing or eliminating SKUs in noncore categories, it is simply an effort designed “to deliver more value” to the customer while simplifying the shopping experience.

At the same time, Walgreens has launched the most ambitious Web redesign yet attempted by a major drug chain, one intended to more closely align the in-store and online shopping experiences, to make them parts of a whole and, in so doing, give the customer purchasing and product-ordering and -delivery choices not previously open to her.

The most dramatic example of Wasson’s impact on Walgreens’ performance came early last fall, when the drug chain unveiled a nationwide flu inoculation program fully a month before most competitors. A year in the planning, the initiative turned on certifying some 16,000 Walgreens pharmacists and other health care professionals as flu vaccine immunizers. As a result, some 5 million patients were immunized against the flu at a Walgreens drug store, the majority before any mass retailing competitor launched its flu vaccination program. Says Wasson: “Walgreens was responsible for 5% of all the flu shots administered in America.”

He points to the flu vaccination effort as an example of “what we mean when we say we want to be on the front line of community health care. Further, it is a perfect illustration of how much value community pharmacy can bring by offering meaningful health and wellness services. Programs such as this are at the core of what we stand for.”

Wasson is equally pleased with the progress of Walgreens’ POWER pharmacy project, one part of its effort to transform community pharmacy. Though it experienced some early challenges, the initiative is transferring much of the administrative and adjudicative functions central to the dispensing of prescriptions from the individual Walgreens drug stores to a central facility, freeing up the pharmacist to spend more time with his or her patients. The program, which Wasson describes as enabling the transformation of community pharmacy from a commodity business into a professional experience, has thus far been rolled out in Florida and Arizona, some 1,000 stores in all.

“We’re now on Version 1.0 of POWER,” says Wasson, “and looking back, I believe we might have underestimated the scope of what we’ve been trying to do. I can honestly say that it’s functioning more efficiently and effectively today than at any time since its launch. In a broad sense, it has taken us back to our roots, back to the future.

“We went through a period at Walgreens when the object was being the most efficient dispenser of prescriptions. But in pursuing that efficiency, we distanced our pharmacists from the patient. The POWER program is enabling us to transform community pharmacy by bringing us into closer contact with the patient, putting us in a better position to advise her about drug therapy and related health care issues. One of the advantages in doing so, aside from putting us in the forefront of the health ace continuum, is in our belief that there’s real potential to be reimbursed for providing clinical services.

“People are looking for solutions to their health care issues. We feel we can provide them. So transforming community pharmacy is not just about lowering the cost of filling a prescription by centralizing key components. It’s more critically about making our pharmacists available to offer the clinical advice and services they have been trained to provide but were previously not in a position to offer.”

Wasson certainly has not been alone in setting Walgreens on a new path. Indeed, he has brought in a handful of executives from outside the chain drug industry, some from outside any segment of retailing. As a result, the occupants of the executive offices on the second floor of Walgreens’ headquarters building on Wilmot Road in Deerfield bear little resemblance to the people who occupied those offices as recently as a year ago. But Wasson insists that he has been very selective in whom he has recruited.

“I respect the Walgreens culture and what it has meant, and continues to mean, to our success,” he says. “The people we’ve hired have come with the understanding that they must fit into our culture. However, we agreed early on that they must also come with some new ideas and new thoughts — and we haven’t deviated from that position.

“The blend of old and new is what’s important. To that end, we’ve retained many of our most capable veterans — [executive vice president of operations and community management] Mark Wagner with 30 years of experience, [senior vice president of pharmacy] Kermit Crawford with 26, to name just two — in key positions.”

In sum, it has been quite a year for this Walgreens veteran of 30 years, a year of unprecedented change, considerable achievement and abundant optimism — an optimism based on the premise that Walgreen Co., effective as it’s been for most of its 108-year history, can be more effective still and, in the bargain, redefine the way community pharmacy is practiced in America. So it is that the job Wasson has begun in rebuilding the drug chain is but a preview of coming attractions.

True, his first year as Walgreens CEO has been a year of unprecedented accomplishment, a year the 51-year-old executive could never have imagined growing up in small-town Indiana or working his way up through the Walgreens hierarchy after graduating from Purdue University’s school of pharmacy in 1981. But it’s also been a year tinged with sadness, as several veteran Walgreens retired or left the drug chain.

“My task,” says Wasson by way of explaining the departures, “has been to infuse new thinking and new ideas into a company that needed those things. Doing so requires a few new people.”

But at bottom, Wasson is vintage Walgreens, a keeper of the culture and tradition that largely built this drug chain. By taking care of its employees, Walgreens will ultimately drive value for its customers and shareholders. “They’re depending on me,” he says simply.

Based on his first-year performance, Greg Wasson is not about to let them down.

ALSO HONORED BY CHAIN DRUG REVIEW:

• Rx Exec of the Year: Kermit Crawford, Walgreens

• Merchant of the Year: Joe Magnacca, Duane Reade

• Lifetime Achievement Award: Andy Giancamilli, Katz Group

• Global Retailer of the Year: Alliance Boots