Retailers, consumers and prices
Do bank woes spell more space for retailers?
Walgreen Co. said consumers’ bargain shopping hit profit in the latest quarter. Still, Walgreen and other retailers might actually get a small benefit from the economic downturn and bank fallout. If banks ease up from opening ATMs on every corner, it could get easier for retailers to find attractive space for their stores.
The drugstore’s executives, in response to a question from UBS analyst Neil Currie during Monday’s conference call, said they’ve seen competition easing for good sites. They said banks started pulling back about six months ago and Walgreen now has more negotiating power when it’s looking for space. Still, it’s sticking with its plan to slow down its heavy dose of store openings. It added 561 stores to its lineup in fiscal 2008 and plans to add 495 new stores in fiscal 2009.
Walgreen also said it may add a loyalty card for its shoppers. So far, it has rounded up more than a million shoppers (the goal is several million) for the Walgreen Prescription Savings Club, which consumers pay a fee for in order to get cheaper drugs and a 10 percent reward on Walgreen-branded products. President Greg Wasson said 25 to 30 percent of those using the card so far are new to its pharmacies.