Walgreen Stores in Lexington Park, MD.
Walgreens has rolled out a new kind of store that shrinks down its square footage and focuses on the pharmacy.
Expect to see fewer front-of-store items, a slimmed down selection of over-the-counter medications and an emphasis on relationships between pharmacists and customers.
It has opened more than 30 small-format pharmacies as part of a pilot, and it may open additional ones depending on how the stores perform. Inside of the company, the project was dubbed “Cooper” — a reference to the Mini Cooper, a small BMW car with a cult following.
Walgreens Boots Alliance is testing new approaches as its competition grows. Sales in fiscal 2019 rose 4.1% to $136.9 billion, but adjusted earnings per share fell 0.5%.
Along with feeling the heat from CVS Health and other drugstores, Walmart and Amazon are both expanding their health care focus. Walmart has opened four clinics that offer a broad array of services at a low price, including primary care and dental care, in addition to the pharmacies it has at many of its big-box stores. Amazon bought PillPack two years ago, laying the foundation for the company to expand into pharmacy.
Walgreens is balancing its investment with cost-cutting efforts that have included layoffs and hundreds of store closures. Shares of Walgreens, which have a market value of $36.7 billion, are down 29% since the start of the year. The company’s drugstores initially saw a sales surge during the pandemic, as people stocked up on essentials and prescriptions, but that dropped off with stay-at-home orders.
Walgreens has turned some of its more than 9,200 U.S. stores into “neighborhood health destinations” — a term it uses to describe locations with health care services along with a pharmacy. In some stores, it rents space to diagnostics company LabCorp, optical company For Eyes and weight loss company Jenny Craig. It has 14 locations that offer primary care through agreements with third-party companies, such as Village MD. More than 230 of Walgreens’ stores have clinics run and staffed with a nurse practitioner from a health system.
Walgreens’ group vice president of pharmacy operations Rina Shah said the company wanted to move away from a “one-size-fits-all approach” and tailor store offerings more to a community and nearby customers.
She said the small-format pharmacy was inspired in part by Walgreens stores near health care systems that are smaller in size and cater to customers picking up medication after getting discharged from the hospital.
In early 2019, it began testing the small-format pharmacies. It now has the stores in a variety of small towns and large cities across the country, including Mobile, Alabama; Greenville, South Carolina; Schenectady, New York; Bethesda, Maryland; Indianapolis, Indiana; Jacksonville, Texas and Knoxville, Tennessee.
Walgreens store in Winston-Salem.
Slimmed down selection
Small-format pharmacies are about a quarter…
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