Chicago is My Home

16
Jul

Deerfield, Ill.-Based Walgreen Co. Plans to Slow Down Growth of New Stores

Author: Adam Fendelman, Category: Business

CHICAGO – Walgreen Co. in Deerfield, Ill. has recently announced that it will slow down its decade-long push to open new drugstores by cutting new-store growth from the current rate of 9 percent to 5 percent a year by fiscal 2011. The company anticipates that the slowdown will save $500 million over the next three years.

Walgreen Co. is planning to put more resources into developing health care businesses such as on-site health clinics.

Forceful store openings have been a key component to the success of Walgreen Co., which is one of the largest U.S. drugstore chain operators, while it competes with other operators such as CVS. According to Walgreen Co. spokesman Michael Polzin, the company has increased its store count by more than 8 percent a year since 1998 and reached its peak growth of 12.2 percent by fiscal 2000.

In recent years, however, Walgreen Co. and its competitors have branched out into other areas to take advantage of the fast-rising spending on health care as Americans age. In addition to allowing Walgreen Co. to focus on expanding in the above-mentioned areas, the company says the cutback in store openings will also provide financial flexibility for potential acquisitions.

Walgreen Co. currently operates 6,297 stores. The company says it’s still on track to have more than 7,000 by 2010.

By Jenna Zizzo