Walgreens 2006 Annual Report Download - page 16

Page 14 2006 Walgreens Annual Report
Another major area of growth is in small towns such as Russellville, Arkansas. Located in the central
part of the state, this town is an example of markets once considered too small for Walgreens.
Russellville’s population is only 23,000, but there are more than 85,000 people within a 30-mile radius
who flock there to shop. Sophisticated mapping tools have helped us identify hundreds of other small towns
in the centers of wider trade areas. In 2006, a third of our store openings were in rural communities.
Research tells us that in rural areas, people consider it convenient to drive several miles to our stores,
especially if we’re close to supermarkets and other retailers they frequently shop. In larger cities and
suburbs, the maximum distance people want to travel to Walgreens is only a mile or two. That demand
fuels our long-term strategy to add stores in existing markets.
We currently have footholds in every major market in the United States, and have No. 1 share in
122 markets. This number underlies the success we garner when we enter new trade areas. And once
we win that No. 1 ranking, we stay there.
Big opportunities in little places
Fitting the inside of the store
to meet local needs
At first glance, Walgreen store interiors
look similar, an advantage that helps
customers find core items whether they’re
shopping across the street or across the
country. But a closer look reveals subtleties
in product selection to fit individual
neighborhood needs and prompt people
to refer to “my” Walgreens.
We use our sophisticated analysis of buying
habits to offer local store managers tools
that augment their entrepreneurial skills.
Consider our Hispanic initiative in
Southern California, where beauty and
hair care aisles place more emphasis on
darker hues. We also showcase popular
Mexican-American grocery brands, cleaning
products and over-the-counter remedies.
In trade areas with large elderly popula-
tions, customers are offered a broader
range of items such as canes, walkers,
blood pressure monitors and support
hosiery. Visit the urban centers of
Chicago, Manhattan and San Francisco
and you’ll find larger-than-usual selections
of insoles for sore-footed pedestrians.
This analysis also supports product
selection in Walgreens growing number
of non-prototype stores, especially those
built on smaller sites in expensive,
high-density markets.
When shelf space is limited, inventory is
narrowed. We must thoroughly understand
exactly what our customer wants and what
she’ll never miss. Personal observation
answers part of that question, but it’s our
sophisticated point-of-sales systems that
extract the “surprise”data used to take stores
from average to peak productivity.
Locations
The town came out for the August grand opening
of a new Walgreens in Russellville, Arkansas,
population 23,000.
The Extreme Makeover –
1990 Stores Still Open in 2006
Total stores
Walgreens Fastest Growing States
Number of stores
2006 2001
Florida 697 539
Texas 550 358
Illinois 511 423
California 438 274
Ohio 198 106
Georgia 111 30
North Carolina 91 10