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CHICAGO -- While acknowledging this year's rough patches, Walgreen Co. head David Bernauer said he still sees strong growth ahead for the nation's largest drugstore chain.
"It wasn't an easy year," Bernauer told the Executives' Club of Chicago at the Mid-America Club, Chicago. "I'm glad it's over."
Nonetheless, Bernauer told local executives the company is on course to grow from about 4,000 stores to 7,000 by 2010. The Deerfield, Ill.-based firm plans 15 to 20 new stores in the Chicago area in the coming year. "We can't build those stores fast enough," he said. "There's plenty of room to grow."
The tight profit climate in the drug and convenience store industry in general was evident Tuesday as news broke that J.C. Penney Co. Inc. is looking for a buyer for its Eckerd drugstores, which have been hit with pricing, inventory and location problems, according to the Chicago Daily Herald.
Walgreen's has also been criticized this year for soft sales in its core foods, health and beauty aids, office supplies and seasonal items. Its stock price suffered when costs were higher than expected.
Bernauer pointed to a strong finish to the firm's fiscal year, in which the company built 430 stores. Profits in the fourth quarter rose 12 percent, to $277 million. He acknowledged that inflation was restricting the company's ability to raise prices but pointed to better September sales in non-pharmaceutical products as a positive sign.
In September alone, he noted, overall sales rose 18 percent, to $2.8 billion.
Discounters like Wal-Mart Stores Inc. and grocers such as The Kroger Co. are making inroads into the prescription market, he said, but Walgreen's can compete with more services and faster shopping. Average Walgreen's customers can shop and be on their way in eight minutes, he said.