Retailers, consumers and prices
Walgreen’s shiny new purchase
Walgreen officially owns New York’s Duane Reade drugstore chain as of Friday, less than two months after the deal was announced. Walgreen, which got its start in Chicago and is based in a nearby Illinois suburb, is now the biggest drugstore operator in New York City after adding 258 Duane Reade stores, two distribution centers and a corporate office to its 70 stores in the area.
A small percentage of Duane Reade’s stores are rather snazzy, some new and others renovated, and stand out compared to other drugstores, including Walgreens stores, in the Big Apple. Those makeovers and Duane Reade’s strong push into private label products were some of what attract Walgreen, which is working on its own store upgrades. (But there are still dozens of Duane Reade stores that have yet to get a makeover.)
Reuters recently toured one of the newest Duane Reade stores, in Chelsea. We thought those of you outside of New York might like a glimpse into what the stores are like.
Here’s part of the fresh food area at the store. This shop is a bit different, with most of the first floor dedicated to groceries. It feels more like a mini-supermarket than a drugstore or convenience store, complete with prepared salads, sushi and even gourmet rice pudding. One floor below, shoppers can buy toiletries, visit a doctor and browse a cosmetics section that’s a bit more like a department store than a drugstore, complete with makeovers. Oh, and they can also get prescriptions filled, which is one area where Walgreen is expected to overhaul operations with its expertise.
The deal cost $618 million, plus the assumption of debt which Walgreen plans to repay or redeem soon. One thing the company won’t get — at least for now — is savings from any naming synergies. Duane Reade will keep running under its own name and chairman and CEO, John Lederer, while Walgreen considers “the most effective way to harmonize both brands over time.”
The 50-year-old Duane Reade name has a lot more recognition in NYC than Walgreens. Of course, Walgreens does have that big, shiny store in Times Square. Right across from, you guessed it, a Duane Reade.
(Photos courtesy of Duane Reade)