Greg Wasson is focused on value.
Wasson, who oversees the direction of the nation's largest drug store chain with sales of $67.4 billion in 2010, applies the principle of value to Walgreens' customer-centric approach to retailing and stands by value when it comes to company principles.
By the end of the year, Walgreens expects to have Consumer Centric Retailing upgrades in more than 70% of its 7,700 stores. These upgrades started in 2009 when Wasson moved into the top position as president and chief executive officer at Walgreens, based in Deerfield, Ill. The initiative is designed to improve the shopping experience and deliver $1 billion in cost savings by the end of the fiscal year compared to the base year of 2008.
The food offering is a key component in the CCR mix with new beer and wine departments and an expanded fresh food offering added as a convenience. Wasson is supporting Chicago Mayor Rahm Emanuel through Walgreens' Chicago Hometown Investment Initiative in which Walgreens has pledged a total of 50 food desert stores in Chicago with 750 new food items, including fresh fruits and vegetables, by 2013.
“By leveraging the drug store locations we have across this country in food deserts, we can become the food oasis in those communities,” Wasson told Drug Store News.
The debut this month of a Duane Reade in The Trump Building at 40 Wall St. in New York City, is described an amalgamation of the best of what Walgreens and Duane Reade has to offer. Walgreens acquired the 257-store Duane Reade chain last year. The acquisition not only gave Walgreens market share dominance in the metro New York area but it gave the drug chain a platform to develop an urban-centric format with the latest innovations seen at the new flagship store.
Food is front and center at the flagship store with an up-market offering that includes a sushi station with chef; a juice bar that sells fresh-made specialty themed smoothies; a Starbucks coffee and fresh bakery counter; and an expanded natural and organic section containing fresh fruit, vegetables, wraps, sandwiches and salads.
Wasson values Walgreens as a community-based retail health provider with 75,000 pharmacies located within five miles of nearly 75% of the population.
He is taking his health care and wellness footprint beyond “bricks and mortar” stores. Earlier this year, Walgreens completed the acquisition of drugstore.com, adding 60,000 additional SKUs to Walgreens' customer offering. The move also elevates Walgreens' position as a multi-channel retailer that can leverage what it learns from online ordering across its retail enterprise.
Bill Bishop, chairman, Willard Bishop LLC, said one challenge Walgreens has going forward is to “figure out how to optimize the online and retail stores at the same time,” especially considering the investment Walgreens has made in its store real estate.
The company is focused on core growth areas and has divested its pharmacy benefit management, long-term care and respiratory therapy durable medical equipment businesses to better leverage its assets and build out its core competencies.
In a bold move that mirrored last year's contract standoff with CVS Caremark's PBM network, Wasson said it would drop out of the Express Scripts PBM network as of Jan. 1, 2012, because the terms of the contract were not in the company's long-term interests. According to Wasson, lower than industry reimbursement rates, deviating from industry definition standards on generic drugs and other contract provisions it found unfair devalued Walgreens ability to serve its constituents in the health care arena.
Based upon the principle of value, Wasson withdrew from contract negotiations and is convinced the value Walgreens brings to the health care marketplace is strong enough to compensate for the potential loss of $5.3 billion or 90 million prescriptions that Express Scripts was projected to reimburse Walgreens in 2011. That figure represents 7% of Walgreens total company sales.