Both of its businesses, retailing and health care, are being swept by massive change. But Walgreens CEO Greg Wasson has told company shareholders he doesn't think the chain is being swept along by transformation but rather is helping to drive it.
"We are in two dynamic industries," he told about 2,000 attendees at the meeting this week in Chicago, "that are converging as consumers become more involved in shopping for their health-care solutions."
Wasson ticked off all the ways in which Walgreens is participating in the sea of changes in retailing and health care including opening clinics that serve customers with the most common chronic conditions such as diabetes; expanding the "community pharmacy" role of its pharmacists and nurse practitioners in filling the gap in primary care that has been growing in the US for many years; and adding more fresh foods to its selection of groceries.
Walgreens also plans to continue to expand its format in other ways so that its stores cover more retail categories. In beauty products, for instance, Walgreens plans to have more "beauty advisors" and boost their training.
On the edges of innovation, Wasson noted, Walgreens already has 13 flagship stores in nine markets where it is "push[ing] the needle on innovation," a "clinical" store in Baltimore in affiliation with Johns Hopkins Medical, and its first "zero-energy" store in Evanston, Ill., which generates more than enough electricity to power all of its own needs. The store includes more than 800 solar panels, two wind turbines and geothermal technology.
"Somebody has to do this," Jamie Meyers, who oversees sustainability at Walgreens' 8,000 stores, told Christian Science Monitor. "We've committed to a chain-wide 20-percent reduction" in electricity consumption by 2020. "We definitely plan on learning from this new store and applying those ideas across the chain."
But not so fast, argued conservative shareholder activist Justin Danhof, who questioned Wasson at the meeting about whether Walgreens is committed to "sustainability" even if it raises prices or lacks a pure business rationale.
"I think anything we look at has to have a strategic and business perspective," Wasson told Danhof, according to a release by Danhof's National Center for Public Policy Research. "But I think you can have both."
In the meantime, investors continue to be pleased by how Wasson is minding the bottom line overall. Walgreens December sales rose by more than 7 percent from a year earlier. And over the last five years, the CEO told the annual meeting, the chain has delivered 145 percent ROI for shareholders compared with 118 percent for the S&P 500.
That's a wellness strategy investors can appreciate.