Deerfield, Ill. Walgreen Co. said it will test a new store format it is calling customer-centric retailing.
According to a Wednesday report by the Chicago Tribune, the drug store retailer is expanding a test to make stores more open, colorful and easier to shop.
Larger signage and expanded beauty aisles are also among the planned changes, as well as added food and wine options and a bolstered electronics selection.
The new format is slated to roll out to 2,500 to 3,000 stores by this fall from 700 now, said Walgreens CEO and president Gregory Wasson. The company's first test was concentrated in Houston and Dallas.
"As we've said before, this is an ongoing process with many checkpoints along the way to allow us the opportunity to tweak and refine as needed," Wasson said in a conference call to investors. "As we move into the next phase, we'll continue to build sales, take work out of stores, lower inventory and, most importantly, improve our customers' overall shopping experience."
Sales at the 31 pilot stores are up 2%, outperforming a control group of stores and suggesting that the makeover will spur revenue growth, Wasson said. Market share in Houston and Dallas remained unchanged to up slightly as the stores changed over, a result the company said was encouraging. Stores were converted for about $40,000 to $50,000 each.
While only 30%-40% of Walgreens stores will make the change to the new format this year, all of the 7,180 drug stores nationwide will dedicate more space to skin care and vitamins. And 5,000 stores are on track to carry beer and wine by the end of the year.