Drug Czar

Walgreen Co. (Deerfield, Ill.), the nation's largest drugstore chain, has reported a 21.4 percent rise in profits for its third quarter ending May 31, 2002. Sales rose 17.5 percent and same-store sales jumped 11.5 percent.

Prescription sales, which account for 61 percent of the company's total, rose 21.9 percent.

Although Walgreen said its success was attributable to improved inventory management and a decline in business expenses, it also praised its expansion plans. While its top two rivals — CVS Corp. (Woonsocket, R.I.) and Rite Aid Corp. (Camp Hill, Pa.) — have been closing down unprofitable stores since late last year to shore up their bottom lines, Walgreen has been opening new outlets. Part of the reason is to strengthen its lead over the other two drugstore chains. The other is to fend off traditional supermarkets like Albertson's (Boise, Idaho) and discount chains like Wal-Mart (Bentonville, Ark.), which also have pharmacies.

The company said it now ranks as No. 1 in 39 markets, while its sales growth in its top 60 product categories is surpassing that of its competitors in all categories: drugstore, grocery and mass merchandiser.

Walgreen chairman Dan Jorndt said the expansion program is ahead of the company's target of 6000 stores by 2010. Walgreen now has about 3760 stores. It has opened 319 so far this year and aims to open a total of 475 for the full year.