Walgreens CEO, Tim Wentworth, revealed the company’s strategic approach to strengthen its growing health-care business by leveraging its existing stores and brand. Despite recent store closures aimed at optimizing its footprint, Wentworth emphasized the pivotal role of Walgreens’ physical presence and customer trust in building a robust health services business.
While acknowledging the ongoing transformation of Walgreens from a traditional drugstore chain to a broader health-care entity, Wentworth challenged the notion of a complete pivot from its retail stores. He highlighted the significant health-care activities already taking place in Walgreens stores, such as administering eight million vaccines in a year. Wentworth underscored the personal and community-oriented aspect of Walgreens, with 85,000 employees engaging with 10 million customers daily.
Wentworth emphasized the trust customers place in the Walgreens brand as a valuable asset, stating that the company can leverage this trust in expanding its health services business. He provided an example of the effectiveness of personal outreach, noting that customers are four to five times more likely to respond positively when a Walgreens pharmacist suggests a health service compared to an insurance company making a similar recommendation.
The CEO, who returned from retirement in October 2023 to lead Walgreens, drew on his previous experience as CEO of Express Scripts, the largest pharmacy benefits management company in the U.S., which was later acquired by Cigna in 2018.
Despite facing challenges such as decreasing demand for Covid-related products, low pharmacy reimbursement rates, and competition from online retailers, Walgreens managed to surpass Wall Street’s earnings expectations in the previous week. However, the company also announced a nearly 50% reduction in its dividend, leading to a decline in its stock value.
