Just before Christmas Illinois based Walgreen held its Q1 2011 Results – Earnings Call Transcript, during the question and answer session of the call Wade Miquelon: Executive Vice President and Chief Financial Officer and Greg Wasson – President and Chief Executive Officer gave listeners some insight into the strategic role of Duane Reade in Walgreen’s retail, merchandising and Private Brand future.
QUESTION: Analyst Scott Mushkin: Jefferies & Company
Okay. And then the final question and I’ll yield the floor. When we look at Duane Reade and we have been very impressed and we ran a whole note about that, and we look at Walgreen’s and some of the stores in your urban areas, I mean how quickly can you get some of these stores, Duane Reade-ized? And are there 1000 stores in the Walgreen’s portfolio that can bring in most of what Duane Reade is doing? And what would the costs be and how quickly could that be done?
ANSWER: Wade Miquelon: Executive Vice President and Chief Financial Officer, Walgreen
I guess I would say is we’re not going to just do a cut and paste of what we’ve done at Duane Reade. I mean what Duane Reade has done is right for Duane Reade and there are elements of that that are right at different stores and different permutations. So we’re already taking many of the learnings across whether it’s private label or beauty or fresh, etcetera. But again, there is not going to be just one cut and paste that goes back across the whole franchise.
This answer is a valuable insight into the future of Private Brand at Walgreen it is nice to know that they are not planning to “cut and paste” the Duane Reade’s Big Apple-centric Private Brand portfolio strategy into their middle America brand. Although a mimicry of the tiering or segmentation may work the brand positioning of DR Delish, Apt 5 or the Bar Code Brand loses its relevance or authenticity to the mom in Boise.
ANSWER: Greg Wasson – President and Chief Executive Officer, Walgreen
Yeah Scott and I’ll weigh in here. I think the way to look at Duane Reade in addition to what it gave us in New York as the leading position in that market, many of their initiatives that you’re talking about really support the initiatives we have in place. Private brand – we’re expanding and enhancing private brand. They’ve got some great expertise there so we’re going to bring that together and be able to accelerate that.
Their upscale beauty, fresh food – the good thing is they really complement and enhance many of our initiatives, which will help us accelerate. So it really won’t be just a plug and play of 1000 stores here, 1000 stores there. It really depends on what makes sense across the entire footprint for us to put in place. There may be some stores where we expand grocery, there may be some stores where an upscale beauty offering makes sense and there may be others where it doesn’t.
So it’ll be – it’s pretty much just helping us accelerate the initiatives and that’s the reason we think we have such a tremendous opportunity in the front end of our stores. CCR is the beginning and these initiatives now will help us really drive the front end.
Source: Seeking Alpha