CFO: Walgreen's New Format Lifts Sales
DEERFIELD, Ill. -- Walgreen Co., the largest U.S. drugstore chain, credits its new store format for causing an "uplift" in sales and lowering costs through better inventory controls, according to a Bloomberg News report.
The new layout, which features lower shelves and fewer items, will be in place at 3,000 locations by the end of 2010, according to Walgreen's CFO Wade D. Miquelon. Of the chain's more than 7,100 stores, 600 have the new format now.
"The early signs are good," Miquelon, 45, said in a telephone interview with Bloomberg News Feb. 1. He declined to say how much sales have grown.
The retailer is focusing more on everyday products, such as food, skin care and cosmetics, and is introducing beer and wine at some locations, according to the report. Sales at stores open at least a year declined 1.1 percent in January.
Steven Shubitz, a Des Peres, Mo.-based analyst with Edward Jones & Co., told Bloomberg News "there wasn't a lot of dramatic change" at the revamped store he visited in Chicago. "There's a lot of disbelief out there with investors about whether the new store format will provide any meaningful improvement in sales. The changes haven't shown up in results."
Beer and wine sales will likely bring in more customers than the redesign, Shubitz told Bloomberg News.
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The new layout, which features lower shelves and fewer items, will be in place at 3,000 locations by the end of 2010, according to Walgreen's CFO Wade D. Miquelon. Of the chain's more than 7,100 stores, 600 have the new format now.
"The early signs are good," Miquelon, 45, said in a telephone interview with Bloomberg News Feb. 1. He declined to say how much sales have grown.
The retailer is focusing more on everyday products, such as food, skin care and cosmetics, and is introducing beer and wine at some locations, according to the report. Sales at stores open at least a year declined 1.1 percent in January.
Steven Shubitz, a Des Peres, Mo.-based analyst with Edward Jones & Co., told Bloomberg News "there wasn't a lot of dramatic change" at the revamped store he visited in Chicago. "There's a lot of disbelief out there with investors about whether the new store format will provide any meaningful improvement in sales. The changes haven't shown up in results."
Beer and wine sales will likely bring in more customers than the redesign, Shubitz told Bloomberg News.
Related News:
Walgreens Taps Jensen to Spearhead Fresh Food Foray
Competitive Watch: Walgreen 1Q Profit Jumps 20 Percent