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    COMPETITIVE WATCH: Walgreens to Expand New Customer-Centric Concept

    Drug store chain¿s growth will focus on renovations including new beer and wine departments, but pace of new store openings will slow.

    DEERFIELD, Ill. -- Walgreens, the giant drug store chain based here, will roll out its new customer-centric retailing (CCR) initiative that includes beer and wine departments chainwide through 2010, said executives on the company’s third quarter conference call.

    According to a report by GlobeSt.com, the 35-store pilot program will be expanded to about 400 stores this fall, and then go nationwide through calendar year 2010.

    "Our CCR format is more open, less cluttered, and provides better sight lines to help locate products," said Gregory D. Wasson, president and CEO. "These 35 stores are performing ahead of plan on all metrics."

    A total of 5,000 to 5,500 units ultimately will be rehabbed, said Wade D. Miquelon, senior vice president and CFO, according to GlobeSt.com.

    Walgreens estimates it will sell a limited selection of beer and wine at 70 percent of its 6,857 drugstores when the rollout is complete.

    Walgreens phased out beer and wine at all but a few hundred stores in the 1990s. Walgreens executives first mentioned in March that they were reconsidering the nearly 20-year-old decision that beer and wine made too

    "The new stores coming online are refreshed and are starting to reflect the new format," Miquelon said. "[Also], some very unique stores in urban areas don’t really lend itself towards this type of refresh."

    The stores are being redesigned at a cost of $30,000 to $50,000 each. The drugstore giant also will introduce more of its less-expensive, private label merchandise, ranging from paper towels to over-the-counter medications, according to a report in the Chicago Tribune.

    Meanwhile, the company will slow its new store openings to about 2.5 percent to 3 percent annual growth.

    Sales for the quarter were a record $16.2 billion, up 8 percent from the third quarter of last year. Comparable total store sales rose 2.7 percent. Net earnings were $522 million, down 8.8 percent from the same quarter a year ago.

    Total sales year-to-date are $47.6 billion, up 7.2 percent from 2008. Net earnings for the first nine months of fiscal 2009 were $1.57 billion, down 8.4 percent from last year.

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    Walgreens Making Convenience Push

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