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Walgreens among retailers holding down health-and-wellness fort

WHAT IT MEANS AND WHY IT'S IMPORTANT In the ever-evolving world of food retailing, two developments stood out last week.

(THE NEWS: Walgreens continues fight against food deserts in Chicago. For the full story, click here)

Walgreens redesigned 10 stores in Chicago’s poorest neighborhoods on the south and west sides to accommodate the addition of 750 food items including fresh fruits and vegetables, frozen meats and fish, pasta, rice, beans, eggs, whole grain cereals and other items that could be used to create a healthy meal.

Meanwhile, further south, regional supermarket chain Publix was addressing a different type of accessibility issue when it announced a new curbside delivery program at two stores in Atlanta and Tampa. Customers place orders online and specify a 30-minute pick-up window. Orders are pulled by personal shoppers and to facilitate the pick-up process customers in Atlanta will use a dedicated drive-thru lane while shoppers in Tampa will park is specially designated spaces. The fee for the Publix Curbside service is $7.99 and there is no order minimum.

These two developments reveal a strange juxtaposition that exists with food retailing. Customers in some markets have limited to no access to quality food while customers in other markets are overwhelmed with choice to the point where such retailers as Publix are experimenting with the convenience of curbside delivery as a means of differentiation.

Now, it could be argued that the typical supermarket, Publix included, is something of a food desert given the preponderance of highly processed products laden with salt, fat and high-fructose corn syrup, but that is a discussion for another day. Still, for those customers who choose to eat healthy, the retailer offers an abundance of fresh items. Publix has enjoyed great success with its approach to food retail –– clean stores, quality products, and friendly associates –– even though lower prices can routinely be had at competitors. It will be successful with the curbside program because customers are willing to pay for the convenience.

For Walgreens, the concept of offering fresh fruits and vegetables is a noble gesture and potentially a smart business move given the success the company enjoyed when it expanded food and consumables more than a decade ago. Walgreens also earns some political good will in its hometown and the move is a preemptive strike against Walmart’s expansion in the city. The cynic worries that if shoppers near the company’s 10 pilot stores would rather buy chips, cigarettes and sugary drinks than broccoli and whole grain bread then the company could be falling into the trap of giving customers what it and others thinks they should have, instead of what they want. Drug Store News hopes the cycle of changes begins somewhere, and that with the sudden addition of healthy food alternatives, customers in these “food desert” communities are compelled to make better shopping choices.

Recent news out of the commonwealth of Massachusetts could go a long way toward that. According to an Aug. 12 New York Times article, physicians at three Massachusetts health centers have begun to “prescribe” healthier eating to their patients, providing low-income families with coupons for $1 a day (one per each member of the family) redeemable for purchases of fruits and vegetables at local farmers markets. The state of Maine is experimenting with a similar program targeted at low-income pregnant women.

Nevertheless, Walgreens’ own informal polling and sales data, generated when the chain began rolling the concept into a few stores last year, suggests the company has tapped into a rich vein of unmet needs. The first such expanded food department, unveiled in a two-year-old store in May 2009 at the intersection of Madison and Western avenues on Chicago’s near-west side, quickly churned up higher-than-expected sales and positive feedback from the community.

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