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Walgreens eyes expansion into food arena

by Tim Linden | June 06, 2010
It is a foregone conclusion that Walgreens will increase its food offerings, including some fresh produce, but when and where hasn't been determined yet, according to company spokesperson Tiffani Washington.

Ms. Washington said that Director of Fresh Foods Jim Jensen and Vice President of Merchandising Bryan Pugh, both of whom are stationed in the large retailer’s Deerfield, IL, headquarters, are in charge of the project.

"They are currently looking at several different options and eventually we will be testing a number of options in different markets," Ms. Washington promised.

Walgreens, which has 7,500 stores in all 50 states, the District of Columbia and Puerto Rico, wants to capitalize on its locations in the nation’s urban centers, said Ms. Washington, adding that it sees itself as a convenient outlet that could fill a need in the “grab and go” arena.

For breakfast, lunch and even dinner, Ms. Washington said that consumers are making decisions on the run and Walgreens would like to capture some of that business. This option includes ready-to-eat products such as salads, fresh fruit and fresh-cut fruit.

Ms. Washington said that another option would be designed to capitalize on the lack of planning that research shows occurs for the dinner meal every night.

“I have heard Bryan Pugh (the chain’s vice president of merchandising) say many times that 75 percent of U.S. households do not know what they are having for dinner by 4 p.m. each day,” said Ms. Washington.

Because of the traffic it generates and its location, Walgreens believes it is well situated to cater to these late-deciding consumers. She said that offerings to this segment might include items such as a pasta bar, entrée- type salads and even a small section of produce.

While Walgreens is well known as the nation’s largest drugstore chain, Ms. Washington said that the company does have limited food offerings in its stores, and it has already experimented in two locations in Chicago with an expanded food section.

Noting the criticism that urban areas are often referred to as “food deserts” because of their lack of retail food outlets, the Walgreens spokesperson said that the retailer appears to be in the perfect position to address that need. With its many locations in downtown, she said it can offer more retail food to that underserved urban population.

The Chicago experiment will be expanded to an additional eight stores later this year. She said the expanded food sections specifically include more fresh food, such as fresh produce, and the items are designed to appeal to shoppers looking for something fast, convenient and that they can eat on the go. She added that many produce items fit that description.

Ms. Washington did speak specifically to the inevitability of this effort, but she said that Walgreens has already determined that it does want to expand its food offerings. The question is not “If?”, but “When and where?”

Walgreens’ entry into the fresh food arena follows a growing trend by other large retailers in the recent past.

Of course, Wal-Mart has transitioned into the nation’s largest food retailer from its earlier perch atop the list of general merchandise providers. That two-decades-old effort is currently being imitated by Target, another general merchandise retailer that is currently implementing plans to become a major food retailer.