Founded in 1901, Walgreens provides the most convenient access to consumer goods and services, and pharmacy, health and wellness services, in America. The company has recorded 34 consecutive years of record sales and earnings, a track record matched by only one other Fortune 500 company.
Walgreens is taking steps to ensure the company’s continued success in the face of a weakening economy. We are transforming into a more efficient and customer-focused company, both for drugstore customers and for patients and payors seeking quality pharmacy, health and wellness services that are accessible and affordable.
Serving customers better
We offer patients a way to stretch their dollars and maintain their prescriptions in one place without sacrificing the safety, service or convenience of their nearby neighborhood drugstore. One example of this customer-centered philosophy has been the successful introduction of our Prescription Savings Club, which has more than one million members and goes well beyond the discount generic programs offered at other retailers. Members receive savings on more than 5,000 name brand and generic medications, including 400 generics that are available for less than a dollar a week. They also receive a 10 percent rebate on all Walgreens branded products that can be used for future store purchases.
Meanwhile, we have expanded our private brand product offerings, which provide greater value to customers. We continue to offer competitively priced consumables, whose sales have been very strong, particularly for fast, easy, midweek fill-in needs in our conveniently located retail stores.
Managing through difficult economic times
We are currently conducting a company-wide initiative to align our costs, culture and capabilities to our strategy and to the realities of the current economic environment. We are targeting approximately $1 billion in annual cost reductions by 2011 through more efficient processes, strategic sourcing and plans to reduce corporate overhead and work throughout our stores.
In the pharmacy, we are working to fill prescriptions more efficiently. We’re in the early stages of rolling out a new initiative to transform – and advance – the practice of community pharmacy. Currently, we’ve focused on our Florida stores where we’re moving tasks such as phone calls, prescription data entry and insurance verification from individual stores to more efficient central processing facilities.
These centers will also fill approximately one-third of prescriptions for delivery to the store when patients request next-day pickup. We’re creating a hybrid approach that blends the best of community pharmacy practices and central fulfillment. These efforts will not only reduce our cost to fill prescriptions, but will give our pharmacists more time to offer expanded counseling services that improve patient compliance and help people better manage chronic conditions such as diabetes and hypertension.
Adjusting our organic store growth
Walgreens remains among the fastest growing retailers in the country, even with our planned slowdown of organic growth from the current 9 percent rate to a rate of between 2.5 and 3 percent by 2011. Slower growth offers two big positives: first, more time to develop our management ranks and focus on improving the customer experience; and second, greater flexibility to invest in opportunities that will strengthen our core retail base and deliver attractive returns to our shareholders.
Growing our health clinics and specialty pharmacy business
We’re growing our health clinics and specialty pharmacy business to complement our drugstores. We now operate more than 680 health and wellness clinics in our stores and on employer worksites. Since acquiring two worksite health center companies last spring, we’ve integrated these services into our new Health and Wellness division, which plans to expand to 800 sites by the end of fiscal 2009. Our health centers on or near employer campuses offer diverse services including primary and acute care; wellness, pharmacy and disease management services; and health and fitness programming. Employers recognize the significant value and cost savings these centers can provide.
Both our retail health clinics and worksite facilities will position us as one of the nation’s foremost providers of health and wellness services. They are highly complementary to our retail pharmacies and increase awareness of our Walgreens brand.
Specialty pharmacy is the fastest growing sector of pharmacy, expanding at about 15 percent a year. It is also very complementary to our core retail pharmacies. We’ve built our specialty business primarily through acquisitions, the largest of which was our 2007 purchase of OptionCare.
A history of innovation
Walgreens pioneered many modern store and pharmacy features, some of which have become standards in the industry. Among those concepts are:
- Computerized pharmacies connected nationwide, introduced in 1981 by Walgreens with its Intercom computer system.
- Point-of-sale scanning — completed chainwide in 1991.
- Freestanding stores with drive-thru pharmacies, introduced in the early 1990s. When Walgreens entered the Indianapolis market in 1992, initially with seven freestanding stores with drive-thru service, it was a watershed development. Since 1994, most new Walgreens have included a drive-thru pharmacy, and today more than 80 percent of Walgreen stores offer this convenience.
- Expanded convenience food and drink section for the "pick-up-a-loaf-of-bread-on-the-way-home" customer.
- Nationwide rollout of one-hour photofinishing and digital photo services, now available at virtually all Walgreens stores.
- "Touch-Tone Prefills." Patients can use an automated phone system to request prescription refills and a pickup time. This information is fed directly into the pharmacy's work queue. Prescriptions can also be refilled online as needed or through Auto Refills, which automatically refill your prescription and sends an e-mail reminder when it's ready.
- Prescription label instructions printed in any of 14 languages, a service introduced chainwide in 2002.
- Large-type prescription instructions, introduced in October 2004. Walgreens became the first drugstore chain to offer this innovation, which benefits the more than 16 million Americans with some form of vision impairment. The service is available free of charge in both English and Spanish.
- Express Pay, which allows prescriptions to be automatically charged to the patient's credit card. This helps speed up the transaction and makes it easier for caregivers to pick up the patient's prescription.
Our People
We are a company that understands we serve our customers and patients best if our workforce reflects the diversity of our world. Core values of dignity and mutual respect are the foundation for providing a workplace that embraces the individuality of all employees and the communities we serve. We recruit service-oriented, skilled and diverse individuals so that our patients and customers find the experience they expect in our stores. Find more information at the Walgreens Diversity Web site.
Walgreens also is leading the industry in employing people with special needs. We’ve designed our warehouses to accommodate workers with physical and cognitive disabilities. We launched this new design at our Anderson, S.C., distribution center, which opened in 2007. More than 35 percent of the facility’s workforce has a physical or cognitive disability such as autism or mental retardation. Learn more at Walgreens Disability Outreach Web site.
Walgreens Health Services
Walgreen Co. offers pharmacy benefit management, mail service, home care and specialty pharmacy services through its Walgreens Health Services division. See more under the Walgreens Health Services Web site.
Walgreens Health and Wellness
Walgreens Health and Wellness division is comprised of Take Care Health Systems, a wholly owned subsidiary of Walgreens. TCHS is the largest and most comprehensive provider of worksite health and wellness centers and convenient care clinics in the country. TCHS is comprised of Take Care Consumer Solutions and Take Care Health Employer Solutions. Take Care Consumer Solutions manages Take Care Clinics at select Walgreens drugstores throughout the country. Patient care at each of the Take Care Clinics is provided by Take Care Health Services, an independently owned state professional corporation established in each market. Take Care Health Employer Solutions manages primary care, health and wellness, occupational health, pharmacy and fitness centers at large employer campuses. Combined, Take Care Health Systems operates more than 660 worksite and retail health care centers.
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