Walgreen Co. is ramping up efforts to feed hurried customers, which potentially will land more fruits and vegetables on the shelves of the largest U.S. drugstore chain.
A few hundred Walgreen’s stores already offer grab-and-go foods such as ready-to-eat salads and mixed fruit cups, and the Deerfield, Ill.-based company is considering expanding that number, spokeswoman Tiffani Washington said.
Walgreen operates 7,149 U.S. stores.
“We’re looking at the right mix of products for the right locations,” Washington said. “Urban areas look like the best opportunity.”
She declined to say how many more Walgreen’s stores may add ready-to-eat food items.
Some Walgreen’s locations sell single pieces of fruit, such as apples, oranges and bananas. The company may add such fruit offerings to more stores but has no plans to open any full-fledged produce sections, Washington said.
“There are no plans in any way to be a grocer,” Washington said. “It is an effort to be a convenient option to our existing consumer base.”
Still, the potential for more shelf space in such a large retailer represents an opportunity for produce growers and shippers, analysts said. Walgreen had net sales of $63.3 billion in its fiscal 2009, up 7.3% from 2008.
Walgreen’s may be “another distribution point to have fresh food available, a new channel,” said Harry Balzer, an analyst with the NPD Group Inc. consulting firm. “It’s an opportunity to get produce in more places.”
Other general-merchandise major retailers are also expanding food offerings. Target Corp. in November said it will add 350 more PFresh stores, which sell fruit, ground meat and other foods, to the 108 it already opened.
Will CVS follow along?
If Walgreen’s successfully expands its food selections, other drugstore chains, such as CVS Caremark Corp., may follow suit, said George Whalin, CEO of Retail Management Consultants in Carlsbad, Calif.
CVS has 7,008 U.S. stores.
“If it works for Walgreen’s, CVS is going to do it too,” Whalin said. “The beauty of Walgreen’s is they’re in neighborhoods, not just shopping centers and strip malls.”