Walgreens 2009 Annual Report Download - page 5

reduce its overall health care costs. This model, offering
pricing transparency for prescription drugs, is being well
received in the market as more companies talk to us
about similar programs.
Wealso continue to expand our market position in the
rapidly growing sector of specialty pharmacy, including
home infusion services.
Walgreens strategy
Our growth strategy and “plan to win – morefrom
the core” have three primary components:
•Leveraging the best store network in America
•Enhancing the customer experience
•Driving cost reduction and productivity gain
During fiscal 2009, we introduced “Customer Centric
Retailing” (CCR), beginning with 35 pilot locations
and expanding to more than 400 Texas stores this fall.
With favorable reaction received from customers,
we will continue implementing this new store format
across most of our chain.
These remodeled CCR stores feature lower shelves and
about 15 percent fewer individual items. Aisles appear
brighter and merchandise is displayed so customers can
easily find products that complement each other, which
provides a more efficient and convenient shopping
experience for today’s busy consumers.
Over time, we believe these improvements will translate
into more frequent customer visits and larger basket sizes.
As well, CCR stores are more efficient to operate with
lower invested capital.
To enhance convenience in our stores, we are also
introducing beer and wine. We expect to make this
change in most of our stores in the next 12 to 18 months,
strengthening our role as America’s most convenient
shopping destination.
Affordable private brands are increasingly popular among
today’s frugal shoppers and represent an opportunity to
boost our front-end sales. We plan to continue to build
this business over the next three years by expanding our
private brand offerings of quality products that bring
value to the consumer.
In September, we launched a new branding campaign
featuring the tagline, “Walgreens. There’s a Way.” For
example, “There’s a way to stay well.” The new tagline
focuses on how Walgreens inspires customers to improve
their daily lives and how we provide health care services
for millions of patients across America.
We are extending and deepening
our relationship within the
communities we serve by creating
the new position of Community
Leader and promoting 1,300 of
our best store managers by the
end of the year. Community
Leadership Management is
getting morefrom the core –
increasing relevance and sales
of our coreWalgreens-branded
services to customers, patients, payors and employers in
the local communities where they live and work.
Our newly revamped website is another example of how
we are enhancing the Walgreens customer experience
and improving our relevancy to consumers. Online visitors
to Walgreens.com can navigate an easy-to-use and powerful
tool that offers new convenience features, including a
mobile version, updated product merchandising and
integrated health content. The site highlights seven
Health Shops that bring health and wellness issues
together with products of interest, while simplifying
ordering online prescriptions.
While we are continuing to open new stores and grow
organically, we have scaled back the pace of openings
and plan to grow our storebase by approximately 4.5 to 5
percent in 2010, compared with nearly 9 percent in recent
years. This move is consistent with our renewed focus
on refreshing our existing storebase and enhancing our
customers’ shopping experience. Our annual organic
store growth beginning in 2011 of between 2.5 and 3
percent is greater than the current pace of new store
openings of all other U.S. drugstore chains.
2009 Walgreens Annual Report Page 3
House calls at the plant
Dr. Steve Goldman (right) ,Corporate Medical Director for
Caterpillar Inc., and Chris Talarico, Sales Vice President for
Walgreens Health & Wellness division, meet at the Caterpillar
plant in East Peoria, Illinois. Here, they discuss the Walgreens-
Caterpillar partnership that will help the heavy equipment
manufacturer reduce overall health costs for employees.
of retail prescriptions
in the U.S. are filled
at Walgreens
18.3%
18.3%