Walgreens

The Walgreen Company (NYSE: WAG), d/b/a Walgreens (without an apostrophe), is a leading pharmacy chain, mail service, and pharmacy benefit manager, with specialty pharmacy operations in 49 states, the District of Columbia and Puerto Rico. On Aug. 31, Walgreens operated 6,941 locations in 49 states, the District of Columbia, Puerto Rico and Guam. The company also operates worksite health centers, home care facilities and specialty, institutional and mail service pharmacies. Its Take Care Health Systems subsidiary manages 220 convenient care clinics at Walgreens drugstores.

Walgreens is one of the two largest drug store chains in the United States.^[2] Walgreens states that it serves 5 million customers per day, filled 583 million prescriptions in fiscal 2007, and expects to have 7,000 stores by 2010.^[3] Walgreens has approximately the same number of stores as CVS/pharmacy. As of Dec. 29, 2007, CVS Caremark had 6,245 drugstores, in addition to other retail facilities. Walgreens had 6,252 as of May 31, 2008.

Walgreens was founded in Chicago, Illinois, in 1901 and has since expanded throughout the United States. Its headquarters is located in Deerfield, Illinois.

A typical Walgreens store is about 14,500 square feet (1,350 m²) with 11,000 square feet (1,000 m²) of sales area. They offer nearly 25,000 items for sale and typically staff between 25 and 30 people per store. On average, one store pulls in $8.5 million in annual sales. Most stores include a pharmacy, a photo lab, a cosmetics counter, and a general merchandise area.

Take Care Health Systems, a subsidiary, operates its Take Care Health Clinics inside an increasing number of Walgreens stores. Nurse practitioners treat common illnesses, prescribe medicines, perform screenings and offer vaccinations. Patients may have prescriptions filled through Walgreens's "Intercom Plus Pharmacy System", or at another pharmacy of their choice. These clinics are open on evenings and weekends, with no appointments necessary, and accept insurance plans. Take Care has 204 clinics in 15 U.S. metropolitan areas (as of Aug. 26, 2008), and expects over 550 planned to open in the year 2008.^[4][5] Walgreens plans to open its first stores in Alaska in 2009, giving the nations largest drugstore chain a presence in all 50 states.^[6]

History

Company history

A typical Walgreens Pharmacy.

The Walgreens chain began with a drug store on the corner of Bowen Ave & Cottage Grove, Chicago, IL. owned by Charles R. Walgreen, Sr.^[7] By 1915, there were five Walgreen drugstores. He added several improvements to the stores such as soda fountains and luncheon service. He also began to make his own line of drug products and was then able to control the quality of the items and sell them at lower prices. By 1916, 19 stores were in operation, all in Chicago. And in that same year, all the stores were consolidated under Walgreen Co. The 1920s was a very successful decade for Walgreens. In 1921, the company opened stores outside of residential areas and also introduced the malted milk shake in 1922. Walgreens also established its very own ice cream manufacturing plants to match the demand for ice cream at that time. By the mid 1920s, there were about 65 stores with an annual sale of 1.2 million dollars. By this time, Walgreens had expanded into other states like Wisconsin, Missouri, and Minnesota. By 1930, there were 397 stores in 87 cities with annual sales of 4 million dollars. The company did not really suffer from the Stock Market Crash and Great Depression. By 1934, Walgreens was operating in 33 states with over 600 stores. After Charles Walgreen Sr. died, his son Charles R. Walgreen Jr. took over and ran the chain until his retirement. The Charles R. Walgreen Jr. years were relatively prosperous, but lacked the massive expansion seen in the early part of the company. Charles "Cork" R. Walgreen III took over after Jr's retirement in the early 1970s, and brought the company through many modern initiatives, including the switch to a computer inventory based system (bar code scanning). The Walgreen family was not involved in senior management of the company for a short period following Charles' retirement. In 1986, it acquired the MediMart chain from Stop & Shop. ^[8]In 1995, Kevin P. Walgreen was made a vice-president and promoted to Senior Vice President - Store Operations in 2006.^[9]

On July 12, 2006, David Bernauer stepped down as CEO of Walgreens and was replaced by company president, Jeff Rein. Holding degrees in accounting and pharmacy from the University of Arizona, Rein was a pharmacist, store manager, district manager, and treasurer prior to being named Chief Executive Officer and Chairman of the Board. Greg Wasson, former President of Walgreens Health Services, was named President and Chief Operations Officer.

On October 10, 2008, Jeff Rein retired from Walgreens and was replaced by Alan G. McNally as Chairman and Acting CEO.^[1]

Recent expansion

The 1,000th Walgreens store, located at the intersection of Dearborn & Division in Chicago, opened at 9:00 a.m. on September 6, 1984. The ribbon cutting ceremony was presided over by Illinois Governor James R. Thompson and the movie legend Cary Grant. Walgreens opened its 3000th store in Chicago in 2000; its 4000th store in Van Nuys, California, in 2003; its 5000th store in Richmond, Virginia, in October 2005; and its 6000th store New Orleans, Louisiana, in October 2007.

Walgreens opened its first store in Hawaii in late 2007, with plans to open 25 to 30 more.

In 2003, Walgreens purchased 16 locations of the Hi-School Pharmacy stores, including the original Hi-School Pharmacy in Vancouver, Washington, and converted them to Walgreens. In 2006, Walgreens acquired the Happy Harry's chain in Delaware, Pennsylvania, Maryland and New Jersey.

With the notable exceptions above, Walgreens's expansion differs from that of its competitors CVS/pharmacy and Rite Aid, in that Walgreens usually expands by opening new stores in new markets instead of by acquisitions.

Contributions to popular culture

Walgreens claims responsibility for the popularization of the malted milkshake (or at least its version of the malted milkshake), invented by Ivar "Pop" Coulson in 1922,^[10] although milkshakes and malted milk had been around for some time before. This development coincided with the invention of the electric blender in the same year.

Store model

An Uptown Houston Walgreens at a street intersection.

Originally, Walgreens stores were connected to local groceries. In Chicago, which is Walgreens primary market, they teamed up with either Eagle Food Centers or Dominick's Finer Foods, usually with a "walkthru" to the adjoining store and often sharing personnel. This concept was instated to compete with the popular dual store format used by chief competitor Jewel-Osco. Eventually, they ended the relationship with Eagle and focused primarily on a connection to the Dominick's stores, which were considered to be of a better quality. PharmX-Rexall stepped in and filled the vacated Walgreen locations joined to Eagle stores.

In its current business model, new Walgreens locations are always set up as freestanding locations at the corners of busy, intersecting streets -- literally making it a "corner drugstore" similar to how many independent pharmacies evolved over the years in the United States. This also usually allows the store to offer additional conveniences such as a drive-through pharmacy and 24-hour shopping that would not be possible in the average shopping mall. Walgreens also offers "auto refill". Customers can have their prescriptions automatically refilled each month for no additional charge. Walgreens sells freshly brewed drip coffees, Icees, and fountain beverages at select stores, as part of the pilot "Café W" program. Over 3000 locations have equipment to refill inkjet cartridges.^[11]

Related ventures

Walgreens formerly owned Sanborns, the largest pharmacy chain in Mexico, having purchased Sanborns from Frank Sanborn in 1946 and selling it to Grupo Carso in 1985.^[12]

In the 1980s, Walgreens owned and operated a chain of casual family restaurants named Wag's, a belated attempt to compete with Woolworth's lunch counters. The Wag's restaurants were very similar in concept to Denny's. Walgreens sold most of these to Marriott Corp. in 1988^[13] and by 1991 the chain had completely gone out of business.

Walgreens is a sponsor of the Juvenile Diabetes Research Foundation and co-produced the Ron Santo documentary This Old Cub, with a portion of the proceeds going to help people with Type 1 diabetes.

Online

The domain walgreens.com attracted an average of approximately 6 million visitors per month in 2008 according to data found on the web analytics site Compete.com.

Health Corner TV

In 2004, Walgreens launched a sponsored TV show called Health Corner, discussing health stories, tips, and advice. The show is hosted by Lisa Thornton, M.D., of Schwab Rehabilitation Hospital in Chicago, and co-hosted by TV and Radio personality Leeza Gibbons. Health Corner aired on Superstation WGN until 2005, when Lifetime Television began to carry it.

Walgreens Health Services (WHS)

Main article: Walgreens Health Services

Walgreens Health Services, established in 1991, is a growing patient-care oriented business unit providing pharmacy benefit management (PBM), mail service pharmacy, home care, and specialty pharmacy services. Its primary division, Walgreens Health Initiatives (WHI), is a PBM whose client list contains over 400 health plans, employer groups, third parties, unions, government entities, and other types of organizations. WHI currently covers the prescription insurance benefits of 13.5 million individuals in a retail network of over 63,000 pharmacies. Also within WHS is the Walgreens On-Site Pharmacy unit, which operates pharmacies inside health care systems and medical facilities.

Environmental record

In efforts to clean the environments of the communities in which Walgreen stores operate, Walgreens teamed up with ImaginIt to bring solar power systems to two distribution centers and 100 out of 6,200 stores.^[14] This has significantly lowered the amount of electricity supplied from outside sources. The distribution centers and stores in California make 20% to 50% of their own electricity from the solar power system.

Walgreens has also started testing the prospects of energy saving lighting equipment in its stores. A few of its test stores have used a system of lighting called "dimming/daylight harvesting ballast created by Axis Technology Group.^[15]

Walgreens has also shown interest in environmental conservation by removing arguably harmful air fresheners from their stores and by selling products made from recycled juice cartons.^[16]

In newer stores, Walgreens has installed motion sensitive lights in sections of the building. The lights only turn on when someone enters the room. Rooms that have these lights include breakrooms, the office, the warehouse/receiving areas, and the pharmacy.

Consumer record

In June 2008, Walgreens "agreed to stop altering prescriptions without physician approval as part of a multi-state agreement to settle allegations of improper billing," reported the Knoxville News Sentinel:^[17][18]

Walgreens was accused of switching the dosage forms on three medications commonly prescribed for Medicaid patients without doctor approvals in order to boost profits. This resulted in Medicaid programs nationwide paying much more for the medications than they normally would have, according to a press release by the [Tennessee] attorney general's office. Walgreen Co. agreed to comply with state and federal laws on the matter, plus pay $35 million to the federal government, 42 states and the Commonwealth of Puerto Rico.

"The compliance agreement will be in effect for five years. Walgreens did not admit liability, as part of the settlement," reported the Chicago Sun-Times.^[19]

Notes

External links

• Walgreens Official Site
• Walgreens Health Initiatives
• Health Corner
• Company information from Yahoo! Finance
• Hoover's: Hi-School Pharmacies Inc.
• Walgreen Family/Children