Walgreens Thinking Smaller to Grow
Walgreens’ CEO Jeffrey Rein says the company is thinking smaller.
Speaking before an audience at the Goldman Sachs’ retail conference last week,
Mr. Rein said the company is considering opening stores smaller than its current
10,000 to 14,000 square-foot units.
“I think you will see in future years more stores that are less sized than
the current prototype,” said Mr. Rein.
The retailer is also looking to reduce the amount of inventory it carries,
with fewer line extensions of analgesics, for example.
We don’t necessarily need to carry everything we carry,” he said. “In many
cases, we have too many products. The customer is confused. We are working on
Walgreen, according to a Bloomberg News report, is looking to operate
12,000 stores in the U.S. Mr. Rein said the company is focusing on the Northeast,
the Carolinas, the Southwest and the western U.S. to expand.
Discussion Questions: What does Walgreens’ CEO Jeffrey
Rein’s announcement the company may look to build smaller stores while reducing
inventory in all stores mean in practical terms for the business? Are smaller
stores necessary in areas where space may be limited, such as urban locations
in the Northeast, for example? Will the focus on inventory reduction adversely
affect the retailer’s relationship with vendors?