Walgreens 2006 Annual Report Download - page 15

W
algreens entered two
new states – Delaware and
West Virginia – in fiscal
2006, bringing our tally to
5,461 stores in 47 states and Puerto Rico.
In 2007, when we open our first store in
Maine, we’ll have Walgreens operating
in all 48 contiguous United States.
Our aggressive expansion program
resulted in a net gain of 476 new stores
for the fiscal year, including acquisitions
and stores affected by Hurricane Katrina.
Next year, we anticipate opening 500 new
stores, with a net increase of more than
400 stores after relocations and closings.
We are well on our way to achieving our
goal of 7,000 by 2010.
We are also open to “breaking the mold.”
Prototype sites are preferred, but there
are times when neighborhood needs or
space limitations call for flexibility and
architectural and engineering creativity.
We’re willing to work with communities
to develop buildings that fit the area, but
they also must fit our shoppers’ needs for
a safe and convenient environment.
In Manhattan, for instance,
we focus on high foot-traffic
locations because freestanding
sites aren’t available and parking
is rarely an option. The average
selling area for approved sites
there is only 6,500 square feet,
just half the space of prototype
stores. Our experience in
San Francisco and other urban
areas serves us well in making
these decisions.
Similarly, we will deviate from our organic
growth strategy in order to acquire
companies that are a good fit, such as
our merger with the 76-store Happy
Harry’s chain based in Delaware. Of the
3,800 stores we opened in the past decade
before Happy Harry’s, less than 30 were
acquired from other companies.
Happy Harry’s was a very unusual excep-
tion to our organic growth strategy. While
we’ll take a careful look at acquisition
opportunities, our future success is
fundamentally tied to identifying and
securing the best sites, then building
stores to the specifications we know
serve customers well.
Expansion in 2007 will continue in both
new and existing markets. States gaining
the largest numbers of new stores will
be California, Florida, New York, North
Carolina and Texas. To support aggressive
nationwide growth, we will open new
distribution centers in Anderson, South
Carolina, in January 2007, and Windsor,
Connecticut, in fiscal 2009.
Walgreens Store Growth
Stores as of Augu st 31
2006 Walgreens Annual Report Page 13
Developing new stores is a balance between art and science.
When the locations are right for us, we make sure our stores
are right for the community.
Bright, inviting displays, such as this one introducing
Men’s Zone personal care products, increase the shopper’s
connection to brands he can buy only at Walgreens.
Serving her customer in Waukegan, Illinois, is beauty
advisor Sabrina Pomales.