Walgreens Plans 450 New Stores in 2003

DEERFIELD, IL-Pharmacy giant Walgreens vows to continue dispensing opportunities for developers and net-lease investors next year, vowing to add 450 stores in 2003, a 20% increase over its scheduled 2002 building plan. “We may not multiply like rabbits, but under current we’ll nearly double—to 7,000 stores—by 2010,” according to the company’s recently-released annual report.

That could mean more than $1.4 billion in 2003 construction alone, based on recent deals of $3-million-plus, and more than $11 billion through the next eight years. While the company has more than $2 billion in real estate on its books, Walgreens stores typically are spun off to investors eying triple-net lease payments. The company will pay a minimum of $898 million in rent in 2003, according to its annual report filed with the Securities and Exchange Commission, with $15.2 billion owed during the terms of the leases.

“All indications tell us it’s the right time to expand,” the company adds. “America’s pharmacy sales are forecast to increase 60% in just four years, and there’s plenty of opportunity for growth—we now fill only 12% of the nation’s prescriptions.”

Walgreens boasts that it has closed just two of the 3,109 stores it has opened in the last 10 years. One of those closings came in November, when the company opened 47 new stores and relocated nine others. Meanwhile, Walgreens reported sales of $2.5 billion for the month, up 12% from November 2001. The same-store increase was 7%, according to the company.

“Ten years ago, our site selection was cannonball-driven,” the company states. “Today, we target new locations like a laser-guided missile. Focus groups have shown that people want a Walgreens within two miles of where they live.”