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Walgreens launches fresh foods foray

In May 2009, Walgreens began offering expanded food departments in a handful of Chicago stores located in what local politicians called “food deserts.”

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DEERFIELD, Ill. —For millions of time-strapped Americans looking for an easy dinner solution on their way home from work, Walgreens soon will deliver a message in many of its stores: We can be that solution.

The chain is laying plans for an expanded selection of prepared and fresh foods in some stores, and has hired veteran food merchant Jim Jensen to fill a new post as divisional merchandise manager in charge of fresh foods. Jensen, who reports to divisional VP and consumables category manager Steve Broughton, last served as director of fresh foods for Tesco’s Fresh and Easy Markets U.S. division, and spent 14 years with 7-Eleven’s fresh foods division.

At Walgreens, Jensen is spearheading a move into “grab-and-go meals, salads, sandwiches and the like,” a company source said. Jensen also will head up a probable launch by the company into its own private-label food brand, including what Walgreens spokeswoman Tiffani Washington called “meal components.” Walgreens already has been in negotiations with such major food suppliers as Nestlé S.A., Sara Lee and Unilever to extend its front-end offerings.

One impetus for the move, Washington said, is the fact that 8-out-of-10 Americans “don’t know what they’re going to have for dinner at 4 p.m. We already have some fresh foods, like eggs, milk and cheese,” she told Drug Store News, “but we are looking for opportunities to put more of these types of offerings into our stores…to capture that on-the-go consumer looking for a quick lunch, or for something simple for dinner. We look at this as another way to leverage our convenient corner locations.”

In an interview with the Bloomberg news service, VP merchandising Bryan Pugh acknowledged, “We won’t get our customer every day on the way home, but if we could get 50% of our customers one day a week…that would do wonders for our sales.”

Walgreens’ foray into fresh and prepared foods isn’t occurring in a vacuum: it’s part of a sweeping and long-term campaign by the 7,162-store drug chain to draw “more from the core” of its dense, neighborhood-centered retail empire. (A special report on the progress of Walgreens’ overhaul campaign will appear in the March 1 issue of Drug Store News.)

One factor that’s sure to ease the chain’s adoption of more fresh foods—which often must be sourced locally both for freshness and for the ability to offer regional brands that appeal to local tastes—is its effort to move management and decision-making closer to each of its local markets across the country. To that end, Walgreens recently designated some 1,300 of its top store managers to “oversee not only their own drug stores, but about five to seven other Walgreens drug stores in their market, along with all the services we offer,” president and CEO Greg Wasson said at the company’s annual meeting of shareholders Jan. 13.

That decision followed another recent move by the company: the transfer of its regional operations executives out of the central office and into their own regions, where their decision-making can be more directly driven by local market conditions.

On a related note, there are no plans at present for a major expansion of the company’s Café W concept, Washington said. Now operating in roughly 380 stores, Café W offers time-pressed commuters fresh coffee, soft drinks, pastries and other consumables out of a large, self-contained kiosk near other food offerings in the store.

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