Walgreens is well-equipped for the future
WHAT IT MEANS AND WHY IT’S IMPORTANT — It would be no small thing to define the retail market for wellness, much less “own” it. But Walgreens is staking its future on its ability to do just that.
(THE NEWS: Walgreens chief: We want to own ‘well.’ For the full story, click here)
In a marathon meeting with some 30 Wall Street investment analysts Thursday, Walgreens’ top decision-makers laid out in detail a bold course for the nation’s top pharmacy retailer: a course aimed at making Walgreens America’s top destination for retail and workplace health-and-wellness services. Said president and CEO Greg Wasson: “We’re evolving from a retail drug store to a retail health and daily living store, putting us squarely at the intersection of two great industries: retail and health care. No one is better positioned to execute this strategy.”
Wasson isn’t just blowing smoke. Behind the company’s ambitious transformation and agenda is a huge and increasingly intertwined infrastructure. It’s an arsenal that now includes:
More than 7,600 full-service drug stores and retail pharmacies, at least one of which is within three miles of 63% of the U.S. population, and which, combined, serve some 6 million customers a day. What’s more, 84% of those stores are freestanding with their own parking, more than 1-in-5 are open 24 hours, and 85% offer drive-through pharmacy services.
No. 1 drugstore market share in 28 of the 66 U.S. markets with populations above 1 million, and top market share in 49 of the top 116 markets;
A total of 728 worksite-based and in-store health clinics offering customers and employees walk-in, no-appointment access to health professionals;
A growing network of specialized and clinical capabilities, including 103 home infusion centers — making it the top U.S. provider of infusion pharmacy services — along with 119 hospital-based pharmacies;
Increasingly robust pharmacy automation and robotic capabilities, allowing Walgreens to migrate more and more of its pharmacy dispensing to central-fill facilities in order to free up pharmacists for counseling and other patient-care services and to reduce labor costs; and
The country’s largest network of certified immunizers — with more than 27,000 pharmacists and clinicians now able to provide flu shots. Last year, they immunized more than 7 million patients.
At the retail level, it adds up to “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,” according to Kermit Crawford, president of pharmacy services. The migration of pharmacy dispensing administrative tasks to more central-fill centers, along with efforts to redesign pharmacy workflow, are “freeing up our pharmacists for the important work of patient care,” he added.
Besides broadening the health-and-wellness mission, Wasson and his top lieutenants in merchandising, marketing, online services and operations had plenty of other marks of progress for the investment community. Among them: the rollout of the Customer Centric Retailing initiative, which has already led to the redesign and remerchandising of 2,200 stores. Another 3,000 Walgreens units will undergo CCR transformation in fiscal 2011, said Bryan Pugh, VP merchandising. What’s more, he said, elements of CCR — including the paring of thousands of redundant and slower-turning SKUs at the front end and a more logical approach to products and department priorities — have already found their way into the whole store base.
What’s more, Walgreens is experimenting with a slew of ideas and merchandising concepts to make its stores more appealing and build the shopper basket. Among them: a new approach to fragrances and cosmetics with a new concept called “Beautiful,” now offered on a test basis in Walgreens’ Union Square store in Manhattan, a constantly evolving approach to digital photo services at the front end and the “Fresh” foods concept, with fresh fruits and vegetables, ready-to-eat meals and other grocery staples now found in some 30 pilot stores in urban markets. The fresh-foods concept will be expanded to some 400 Walgreens stores next year, Pugh said.
“CCR laid the foundation on which we’re going to grow our front end,” he said. “It’s allowed us the elbow room to expand with new initiatives.”
Walgreens, Take Care Clinics continue to play active role in diabetes care
DEERFIELD, Ill. One of the nation’s largest drug store chains and its retail clinic subsidiary will offer patients free blood-glucose and A1C testing in honor of American Diabetes Month.
Walgreens said Thursday that the tests will be offered at more than 1,700 stores and Take Care Clinics nationwide on Nov. 12 and 13, from 10 a.m. to 6 p.m.
As the diabetes rate in the United States reaches epic proportions — the Centers for Disease Control and Prevention predicted that diabetes will affect as many as 1-in-3 adults by 2050 — Walgreens continues to play an active role to prevent this from occurring. Both in November 2009 and this past February, Walgreens and Take Care Clinics offered free blood-glucose testing for patients. More than 200,000 people were tested during these prior events, and more than 25% tested at-risk for diabetes.
“Walgreens recognizes the need to further heighten diabetes awareness, and by offering free testing in thousands of communities nationwide, we’re providing a valuable healthcare resource that may save lives,” said Kermit Crawford, Walgreens president of pharmacy services. “Through these events and through interaction with our pharmacists and Take Care Clinic nurse practitioners and physician assistants, we’re providing the tools and information to improve the lives of those at risk for or affected by diabetes.”
Each participating Walgreens will host an eight-hour walk-in clinic offering a free blood-glucose test or, in most states, for individuals diagnosed with diabetes, a free A1C test, the company said. Walgreens also added that its pharmacists, Take Care Clinic nurse practitioners and physician assistants are available for patient consultations. In most locations, they also will administer the tests.
Walgreens chief: We want to own ‘well’
DEERFIELD, Ill. The healthcare landscape is changing. There’s a new value-driven consumer who has emerged and, in light of this, retail pharmacy giant Walgreens is in the midst of an evolution into “a retail health and daily living store” and is on a mission to “own well.” That was a key message that an optimistic Greg Wasson, Walgreens president and CEO, had for Wall Street during the company’s Analyst Day conference on Thursday in Chicago.
“As patients gain more access to healthcare information and they become more responsible for making their own healthcare decisions, patients are indeed becoming more shoppers of health care,” Wasson said. “And, frankly, that trend is good for us.”
The trend puts the company — which has more than 70,000 providers and serves 6 million patients each day — squarely at the intersection of the retail and healthcare industries. And if you ask Wasson, that’s a great place to be. “We are really evolving to ‘a retail health and daily living store.’ Our vision is to become ‘My Walgreens’ to everyone in America,” Wasson said. One may consider this a lofty goal, but Wasson was quick to remind analysts that two-thirds of all Americans live within 3 mi. of a Walgreens location.
In addition to the important work the company is doing to position itself as the “new healthcare provider,” leveraging its 8,000 points of care and the health professionals in them — including 26,000 certified immunizing pharmacists, a major focus for the company as it seeks to redefine the role of the community pharmacists in the national delivery of health care — Walgreens is equally focused on transforming its stores to be more than just another drug store on the corner. Hence, the emphasis on “daily living store.”
That transformation began with the rollout of the company’s Customer Centric Retailing, or CCR, store format — now in 2,200 of its stores — and has continued with the expansion of its urban prototype and the newly announced focus on fresh foods. “We have tremendous opportunity in the front-end of our stores,” Wasson said.
Wasson kicked off the all-day conference, which also included comments from several other senior executives who highlighted milestones and growth plans for Walgreens. As millions of Americans gain coverage under healthcare reform and further stress an already overburdened healthcare system, Walgreens — which operates more than 7,600 retail stores, nearly 730 worksite and retail-based health clinics and more than 100 medical campus pharmacies — clearly is working to strengthen its foothold along the frontlines of health reform with a focus on prevention and management of chronic disease.
“We now have 30 million more Americans who are going to gain coverage, and that is certainly going to challenge the system; we have an aging population … 1-in-3 Americans in the next 10 years will turn 65; we have a higher incidence of chronic and complex diseases as people age; and, to top that off, we have a shortage of primary care physicians, so there are threats and opportunities in health care,” Wasson said. “The threats are the fact that all of us in health care have to have a relentless focus on cost reduction, and I can assure you that we do. The opportunities, though, that arise are more focused on the prevention and management of chronic disease, and that’s where we are headed.”
What this means is that patients will see a continued expansion of scope of services to ensure that the company’s providers are viewed as a critical link in the screening and prevention of chronic conditions. “What we have and what we are building is an integrated network of healthcare providers, and that is built on the foundation of our 26,000 retail pharmacists, who we like to refer to as the new healthcare provider,” Wasson said.
Wasson also provided an update on the company’s three core strategies: Leveraging its store network, enhancing the customer experience, and reducing costs and boosting productivity. Among the milestones mentioned:
- Walgreens slowed the pace of new store openings from 9% growth in 2008 to 4.2% in 2010. Going forward, the company expected growth of between 2.5% and 3% in fiscal 2011;
- Over the last two years, the company has acquired more drug stores than any other time in the company’s history. As a result, Walgreens now is No. 1 or No. 2 in 226 markets;
- Since launching its Customer Centric Retailing initiative in 2008, the company will have converted more than 2,000 stores to the format by the end of 2010 and plans to finish the rollout of 5,500 stores by the end of 2011; and
- Walgreens is expanding its infusion pharmacy services as evidenced by the September announcement to acquire substantially all of the assets of Omnicare’s home infusion business.
“We are going to skate to where that puck will be, and that’s more prevention and management of chronic disease,” Wasson said. “And we want to own the strategic category of ‘well.’”