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Walgreen is your corner drugstore, selling prescription and OTC drugs and an array of other merchandise.
WAG will soon lose all of its pharmacy business to mail-order companies. More than half my patients already have to pay double or more for the privilege of picking up their meds at bricks-and-mortar; they find the mail-order more convenient and much cheaper. My fixed-income seniors point out that medication costs are more than housing, food, or any other single expense they have, so they are looking to trim it any way they can. The ones who don't get mail-order go to Wal-mart, which can undercut any price WAG can offer.My wife's father used to work for the WAG home care division, doing small acquisitions. WAG's famed penny-pinching management usually would not authorize competitive bids - they weren't looking to establish monopolies, like their competitors were - and so they have been shut out of this niche as well. (He was fired more than 2 years ago so I don't think this counts as insider information. The money from his salary went to pay those dividends folks are so excited about; the acquisitions he would have made simply didn't get made. Short-sighted.)That will leave WAG with a network of stores and pharmacists that cost a lot of money but which do not get the steady stream of customers walking past the 'front end' to the back to pick up their Rx. WAG has serious cash flow problems and the increasing dividend is predicated on increasing revenue. WAGs original plan in 2005 was to have 7000 stores by 2012. How's that working out for them? It's not - they scrapped that plan years ago. Where is the extra revenue going to come from?
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