Retailers may be cutting back but they're not cutting out..
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Several retailers seemed impervious to the suffering economy. Walgreen was one. With its 6600 retail units, broad merchandise selection and pivotal role in the filling of prescriptions for a growing, aging America, it seemed perfectly positioned to ride this all out.
But patients are skipping prescription refills – even skipping doctor’s appointments – to save money. And when they do fill prescriptions, it’s increasingly via mail order or on the Internet.
So Walgreen is re-examining its formerly aggressive growth policy. In a recent interview with the New York Times, president and chief operating officer Greg Wasson acknowledged the slowdown. “We are slowing store growth from 9 percent [square footage expansion] in 2008 to 5 percent by 2011. It allows us to put about a half-billion dollars of capital expenditures back into the stores.”
Okay, so here’s the glass-half-full part: If Walgreen has about 60 million square feet of retail, 5 percent is an additional 3 million square feet. And then there’s the other $500 million that will be invested into its existing stores.
In other words, industry, look to the opportunities that are there – not to the opportunities lost.
What do you think?
-Steve Kaufman, VMSD editor
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There may be fewer opportunities, but we have to be smarter and partner with others who can bring additional capabilities to a proposal so that the project can be shared, sold and profitably delivered to the retailer.
John Empfield
Panel Processing, Inc