Walgreens Background

Founded in 1901, Walgreens provides the most convenient access to consumer goods and services, and pharmacy, health and wellness services, in America. The company has recorded 34 consecutive years of record sales and earnings, a track record matched by only one other Fortune 500 company.

Walgreens is taking steps to ensure the company's continued success in the face of a weakening economy. They are transforming into a more efficient and customer-focused company, both for drugstore customers and for patients and payors seeking quality pharmacy, health and wellness services that are accessible and affordable.

Managing through difficult economic times

They are currently conducting a company-wide initiative to align their costs, culture and capabilities to our strategy and to the realities of the current economic environment. They are targeting approximately $1 billion in annual cost reductions by 2011 through more efficient processes, strategic sourcing and plans to reduce corporate overhead and work throughout our stores.

In the pharmacy, they are working to fill prescriptions more efficiently. They're in the early stages of rolling out a new initiative to transform – and advance – the practice of community pharmacy. Currently, they've focused on their Florida stores where they've moved tasks such as phone calls, prescription data entry and insurance verification from individual stores to more efficient central processing facilities.

Adjusting organic store growth

Walgreens remains among the fastest growing retailers in the country, even with their planned slowdown of organic growth from the current 9 percent rate to a rate of between 2.5 and 3 percent by 2011. Slower growth offers two big positives: first, more time to develop their management ranks and focus on improving the customer experience; and second, greater flexibility to invest in opportunities that will strengthen their core retail base and deliver attractive returns to their shareholders.

Growing health clinics and specialty pharmacy business

They're growing their health clinics and specialty pharmacy business to complement their drugstores. They now operate more than 680 health and wellness clinics in their stores and on employer worksites. Since acquiring two worksite health center companies last spring, they've integrated these services into their new Health and Wellness division, which plans to expand to 800 sites by the end of fiscal 2009. Their health centers on or near employer campuses offer diverse services including primary and acute care; wellness, pharmacy and disease management services; and health and fitness programming. Employers recognize the significant value and cost savings these centers can provide.

Both their retail health clinics and worksite facilities will position them as one of the nation's foremost providers of health and wellness services. They are highly complementary to their retail pharmacies and increase awareness of their Walgreens brand.