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Walgreens, New Orleans area celebrate unveiling of store 6,000

BY Jim Frederick

NEW ORLEANS —Less than two years after passing the 5,000-store mark, the growth juggernaut that is Walgreen Co. celebrated another big expansion milestone in its oft-repeated quest to reach 7,000 stores nationwide by 2010. And this time, the company chose as the site of its milestone grand opening a city still clearly in need of some cheering up.

Amid the brassy strains of a Dixieland jazz band and an appearance by NASCAR legend Richard Petty, Walgreens took the wraps off its 6,000th drug store Oct. 24. The event heralded both a major milestone for the chain and a clearly welcome step in this city’s halting efforts to return to normalcy more than two years after Hurricane Katrina devastated much of the city.

Walgreens chose New Orleans’ historic Carrollton neighborhood, close to downtown, as the site of its 6,000th unit. In a city still struggling to regain its economic and cultural footing, that decision clearly struck a chord. Local Walgreens employees and community leaders candidly expressed their hope that the new store would spur a revival of the Carrollton community and rejuvenate redevelopment efforts.

“By opening its 6,000th store in New Orleans and focusing on our continuing health care needs, Walgreens is demonstrating its commitment to our city and region,” said New Orleans Mayor Ray Nagin. “This grand opening…illustrates that New Orleans is rebuilding.”

Walgreens has operated in the Crescent City since 1938. “New Orleans is a unique market for us,” company chairman and chief executive officer Jeff Rein, with “a diverse mix of customers” including seniors, college students, natives and tourists.

“As we watch the market overcome amazing obstacles, we will continue…to meet its evolving needs,” he added. “For many here, Walgreens is more than a drug store; it’s a one-stop shop for everyday necessities.”

The opening drew big crowds of consumers, community and civic leaders and Walgreens management, including Rein and president and chief operating officer Greg Wasson. Walgreens also provided free blood glucose screenings in 16 New Orleans stores with the help of Xavier University pharmacy students, and presented the Juvenile Diabetes Research Foundation with a check for more than $2 million in donations raised in its stores. Also featured was the Walgreens Wellness Tour bus, which in the two years since the tour began has provided health screenings for more than 311,600 Americans, according to the company.

The event also gave Walgreens leaders a chance to honor hometown district manager Eddie Poindexter. Addressing the opening-day crowd just prior to the ribbon cutting, Rein and Wasson credited Poindexter, who runs the 28-store New Orleans East district, for his leadership in getting dozens of Walgreens stores back into operation quickly after Katrina.

“The pride exhibited by Walgreens customers and employees in the months since Hurricane Katrina has been inspiration for our entire company,” said Rein. “Thanks to superb teamwork, we were one of the first retailers that reopened to serve patients with critical medical needs.

“More than 700 Walgreens employees traveled from across the country to help our New Orleans folks with recovery efforts,” Rein added.

“After the storm, we had three stores still open out of the 28 in my district,” Poindexter recalled. It was only through the determined efforts of local Walgreens employees—including some made homeless by the storm—that some stores were cleaned up and reopened just days after the flooding receded, he said.

“There’s still several stores that are closed,” Rein added. Nevertheless, said Walgreens’ top executive, “At the end of 2008, we’ll have moved ahead. Of all the 74 [total Gulf Coast] stores that closed, just three will not come back long term.”

“We have about 20 to 24 stores coming in New Orleans in the next two or three years,” Rein said at the opening.

Indeed, the opening of the Carrollton unit marks the 48th Walgreens store in metro New Orleans, an increase of more than 20 percent since 2000. By the end of next year, Walgreens will have more stores in the New Orleans metro area than it did prior to Hurricane Katrina.

In an interview, Wasson predicted Walgreens would easily reach its “7,000 by 2010” goal. “We’re at 6,000, and it’s still 2007,” Wasson remarked with a laugh. “Clearly, I think we’re going to make it.”

One highlight of the new store: Walgreens’ latest concepts in the pharmacy department, including distinct wood-style flooring to set the department off from the rest of the store within a separate rear-corner alcove, more privacy for patient consultations, a quiet waiting area with comfortable seating and double drive-through windows.

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Big crowds greet Tesco debut in Los Angeles

BY Doug Desjardins

LOS ANGELES Tesco wanted to make a good impression with its Nov. 8 Fresh & Easy debut in Los Angeles—a city where image is everything—and it did just that with a huge crowd jamming the aisles on opening day. Company officials reported similar turnouts at five other grand openings in Southern California and acknowledged customer response exceeded expectations.

More than one hundred people stood in line waiting to get into the Los Angeles store, with employees letting customers in as others left. And what they saw inside was a Tesco’s new hybrid combining elements of Trader Joe’s, Whole Foods and 7-Eleven with some borrowings from its stores in Europe.

The basic concept of Fresh & Easy is a convenient shopping experience with an emphasis on healthy food and prepared meals from its Fresh & Easy private label. During a brief tour of the crowded store, Uwins explained that 50 percent of its food offerings are from its private label and that everything is created, cooked and packaged at its own state-of-the art “kitchen” in Southern California, including all of its prepared meals.

“We expected pre-prepared meals to be a massive hit here in the U.S.,” said Simon Uwins, Tesco’s chief marketing officer. “And so far, judging from the gaps we see in our refrigerated cases, they’re being cleared out rather fast.”

Several things set Fresh & Easy apart from other grocery retailers like Trader Joe’s and Whole Foods, the two it resembles the most. As Uwins mentioned, its Fresh & Easy private label has a 50 percent penetration rate and is represented in nearly every major food category including produce, meat, prepared meals, juice, coffee and mixed nuts.

And that reliance on private label allows it to offer some very competitive prices. Overall, Tesco says its prices are well below its main rivals at standard supermarkets. “We estimate our prices are about 20 percent lower than most supermarkets in the area,” said Uwins.

Its selection general merchandise, health and beauty and over-the-counter medications is small supermarket standards and runs more along the lines of a convenience store, though with a broader assortment. Basics like paper towels, diapers and pet food are stocked in a single aisle and its HBC and OTC products are located on one long shelf toward the back of the store capped with a section for greeting cards and magazines.

The rather small selection—and the complete lack of private label products—shows Fresh & Easy is primarily about the food, though that could change. “There are no private label products outside of food right now but that’s not to say that won’t change,” said Uwins.

The in-store signage is also unique and stamps Fresh & Easy as an organic and eco-friendly retailer, a good image for Southern California. Nearly every green, cardboard endcap features a message about its products including “all our bagged coffee is certified organic” and “our desserts contain 0 percent trans fats.” LED lighting is also used in the store, something else pointed out in its signs. The store doesn’t sell cigarettes but do carry a large selection of wine along with liquor and beer.

The checkout system is completely automated with 100 percent assisted self-checkout. Five checkout stands are small and designed for 15 items or less and the rest are a bit larger with scanners and self-pay systems (though there were plenty of employees nearby to help out people not familiar with the concept).

As expected, Tesco had some detractors at its grand openings in the form of labor unions and neighborhood groups. The Carpenters Local 1506 picketed in front of the Los Angeles store and handed out fliers claiming that a group hired by Tesco to help build its stores “does not meet area labor standards, including paying for health care and pension for all its employees on all projects.”

Tesco has a second wave of five openings planned for Las Vegas on Nov. 14 and plans to have stores open in the San Diego market in late November and Phoenix in early December. It expects to have 50 stores operating in California, Nevada and Arizona by next February.

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Costco announces October sales figures

BY Doug Desjardins

ISSAQUAH, Wash. Costco reported a big 9 percent jump in same store sales in October.

Leading the way was a 17 percent increase in sales at its international stores with U.S. sales jumping 7 percent. The increase beat the 5.7 percent average predicted by analysts for the month.

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