Will Walgreens be redefined by its sushi?
Being car-less on the outskirts of Logan Square, Chicago, I find myself shopping at Walgreens a lot. Big name grocers are too far away, the farmers’ market is weekly and I tend to use the nearby local chain for bigger grocery hauls. Walgreens is the nearest spot for quick food purchases. I frequently eye the revolving lineup of frozen Nice! brand foods looking for something that could pass as healthy. I was surprised recently when I found the store outfitted with two new coolers filled with "fresh" grocery items, among them fruit and vegetables, sushi and something called "BBQ turkey tips" (which looked unnerving). I tried the sushi.
Admitting that I tried Walgreens’ sushi tends to make people wonder how many times I had to return for antacids in the aftermath. In fact, the sushi’s not bad, about what you’d expect from pre-packaged product. The reaction that the thought provokes, though, indicates an image problem Walgreens must overcome as they continue — to quote CEO Greg Wasson — "deliberately blurring the channels."
Though Walgreens still may not strike many people as a place to grocery shop (don’t assume you or the people you know are average Americans), the location I frequent is not the first to stock higher-quality grocery offerings, nor does it represent the company’s first foray into raw fish.
The flagship store in Chicago appeared in 2012 as an upscale megaplex for Loop dwellers and has a slew of Yelp reviews praising the in-store sushi bar. The company has also rolled out 628 Well Experience stores nationwide (as of Walgreens’ Q2 earnings call), meant to feel more like grocery stores than pharmacies.
The one I frequent, though, maintains a definite drugstore vibe. Thus Walgreens seems to be taking more than one route to hybridizing store formats.
I’ve noticed in the past week that many of the new cooler products seem to be selling well, in particular the pre-packaged sandwiches and parfaits. Perhaps they fill a unique local need. (There has been an onslaught of new expensive gastropubs here, but notably few moderately-priced, no-frills eateries.) The coolers are placed near the relatively small store’s checkout, too, which seems wise in the way of promoting health-conscious impulse buys.
Whether Walgreens’ store format tweaks and revamps are successful could vary from store-to-store, neighborhood-to-neighborhood, but this one seems successful. I bought more sushi on my last visit, and the cashier mentioned that it sold well. No word on the turkey tips.
- Walgreens Debuts Flagship with Sushi Bar, Smoothies, Wine, Coffee Bar and More – Eater
- Walgreens’ Flagship Store Yelp reviews – Yelp
- Walgreens Ready to Blur Retail Channels in Stores Across U.S. – Forbes.com
- Walgreens CEO Discusses Q2 2014 Results (Earnings Call Transcript) – Seeking Alpha
Does the expansion of Walgreens’ fresh food offerings have the potential to redefine its role in urban markets and elsewhere? What factors play into the success or failure of these initiatives in a particular store or market?