Walgreen’s Ups Ad Budget

Discussion
Jan 09, 2003
George Anderson

By George Anderson


Jeffrey Rein, chief operating officer, Walgreen’s announced yesterday that the nation’s largest drugstore chain would increase its budget 12-13 percent and spend approximately $360 million on advertising this year.


The decision comes as Walgreen’s attempts to generate greater volume and profits from its front-end categories. The drug store chain reported that its December front-end same-store sales fell 0.2 percent.


Moderator’s Comment: Do you think Walgreen’s decision
to increase its advertising budget will have a significant impact on its front-end
(non-Rx) business?


Walgreen’s spent less on promoting/discounting during
the Christmas season in an effort to protect margins. Evidently, the chain has
decided that more volume at lower margins is better than less volume at higher
ones. [George
Anderson – Moderator
]

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