In a conference call with analysts yesterday, Walgreens executives said they didn't expect to grow the company's business through large acquisitions or a jump in new store openings.
Instead, the drugstore chain is looking to improve next year by using store remodels and more targeted product selection to build rings with existing customers. Walgreens also is confident it will acquire as customers a large number of the 32 million individuals who will soon have insurance due to health care legislation passed by Congress. The company's 7,600 stores are located within three miles of two-thirds of the population in the U.S.
"We're evolving from a retail drugstore to a retail health and daily living store, putting us squarely at the intersection of two great industries -- retail and health care," said Greg Wasson, president and CEO of Walgreens, in a statement.
Kermit Crawford, president of pharmacy services at Walgreens, added, "We are freeing up our pharmacists for the important work of patient care through our efforts to take administrative tasks out of the retail pharmacy and redesign workflows. We also are 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."
Among the chronic diseases that Walgreens is looking to address is diabetes. The chain pointed to studies showing that one in three Americans will be a diabetic by 2020, up from about 10 percent today.
The company is continuing to push itself as a destination for immunizations, whether through in-store clinics or the pharmacy. Walgreens saw the number of flu shots it administered go from 1.2 million in 2008 to more than seven million last year.
Mr. Crawford told analysts that Walgreens sees opportunities in vaccines for the flu, pneumonia and shingles. He said the company has the ability to rapidly respond to outbreaks such as the recent occurrence of whooping cough in California.
Discussion Questions: Do you think Walgreens is mapping out a smart/realistic plan for business growth? What competitive challenges will it face in acheiving its goals?