U.S. health care spending is expected to grow from 17 percent of gross domestic product to 20 percent by 2020, driven by an aging population and health care reform, which is expected to bring 30 million more people into the system. At the same time, health care is beginning to see a shift in payment models from fee-for-service to pay-for-performance. That’s good for Walgreens and community pharmacy, as the company is well positioned to play a greater role in these emerging models and expand its role beyond the pharmacy market to the much larger $2.6 trillion health care market.
On the retail side, consumers continue to look for value and extraordinary service coming out of the Great Recession, and Walgreens introduced 2,000 new private brand items last year to meet growing demand for trusted retail brands. In addition, more opportunity in categories such as beauty and fresh foods is opening up to Walgreens as consumers shop across all retail channels. And finally, digital commerce is expanding rapidly and driving major change in both retail and health care.
Walgreens is seizing the opportunity created by these trends to lead the market for decades ahead by focusing on its three strategic growth drivers: creating a Well Experience, advancing community pharmacy and establishing an efficient global platform on behalf of its customers and shareholders.
Creating a Well ExperienceBeyond enhancing the physical store, Well Experience also means a highly engaged employee delivering extraordinary customer care with the right products and solutions in every community in America. Walgreens has expanded the number of stores incorporating its Well Experience concepts from 400 at the start of fiscal 2013 to 600 today. Walgreens is ensuring it has the right products and solutions by making it easy for shoppers to get in and out with what they need, elevating its beauty offering and accelerating the convergence of retail and health care by pulling together its pharmacy and health care services with its over-the-counter health and wellness products into more seamless solutions for customers.