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Walgreens Boots AllianceWalgreens

Walgreens Boots Alliance : advertising & marketing profile

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Walgreens is America's largest drugstore chain by revenues, and also now the leader by store outlets, as a result of a series of regional acquisitions, including the famous Duane Reade drugstore chain in New York, added in 2010. (Competitor CVS Health is bigger by total revenues because of its large pharmacy benefits management division). Walgreens has come to position itself as the "front line" for the delivery of healthcare services in the US, with an expanding networking of in-pharmacy and worksite healthcare clinics, offering diagnosis and treatment for minor ailments. However it also sells a broad range of non-healthcare products, giving it a growing presence in the convenience store segment. In 2012, the group made a big jump into Europe, agreeing to acquire an initial 45% stake in local retailer and wholesaler Alliance Boots. It bought out the remaining shares slightly earlier than expected, at the very end of 2014. A year later, the group unveiled a $17.2bn bid for US rival Rite Aid, that would have consolidated Walgreens' position as the dominant drugstore chain in the US. However, that deal was abandoned 18 months later after protracted and fruitless negotiations with regulators.

Click here for Adbrands Account Assignments. The company declared gross advertising expenses of $665m in fiscal 2018, after vendor allowances.


Walgreens' main direct rivals are CVS Health, which has a significantly larger pharmacy benefits division as a result of its merger with Caremark, and Rite Aid. See Retailing Sector for other companies

Brands & Activities

By August 2017, Walgreens operated 8,100 drugstore outlets in all 50 US states plus DC, Guam and Puerto Rico. The group has expanded its estate through selected strategic acquisitions of local specialist pharmacies. In one of its most notable such purchases, it agreed in early 2010 to acquire New York's best known drugstore chain Duane Reade for $1.1bn, adding 258 stores in one of the country's biggest markets. Although it had reported operating losses in the years preceding its acquisition, Duane Reade had the highest sales per square foot of any retail drug store chain in the US. Walgreen expanded its retail footprint further in 2011 with the acquisition of online retailer Drugstore.com for $429m. In 2012 it added a collection of around 144 drugstores in southern US states including Arkansas and Mississippi in 2012 with the acquisition of USA Drug Inc for $438m, followed by 76 Kerr Drug outlets in North Carolina in 2013. All subsidiary brands except Duane Reade have been eliminated in favour of the main Walgreens banner, and weaker stores have been pruned from the portfolio.

In October 2015 the group announced plans to acquire Rite Aid for $9.4bn, or $17.2bn including the smaller company's debt. That deal was approved by shareholders in early 2016, but still required a green light from regulators. The acquisition of Rite Aid's 4,600 drugstores in 31 US states would have created a group with around 13,000 outlets and combined sales of close to $130bn. However, negotiations with competition regulators hit a brick wall after 18 months of protracted discussions. Walgreens abandoned the original plan in June 2017 and instead proposed an alternative offer to acquire a little under half of Rite Aid's stores for $4.4bn, and leave the remainder of the company intact. The first of 1,932 stores covered by that agreement joined the Walgreens network in Nov 2017, with the others due to transfer in stages by Spring 2018.

All stores sell prescription drugs and over-the-counter medicines but also a wide variety of general merchandise including beauty and personal care products, household items, confectionery, photographic services, greeting cards and convenience food. In 2009 it even began selling beer and wine in some outlets in order to build its share of the convenience market. By 2017, alcohol generated sales of around $1bn from more than 8,200 Walgreen stores. In total, Walgreens filled some 764m prescriptions during the course of fiscal 2017 (or 990m on a 30-day equivalent basis). Prescriptions account for the biggest part of group sales by far, 69% of total revenues in ye 2017. Non-prescription consumer healthcare added a further 9%, with the remainder from general merchandise. The group's US-based loyalty programme is branded as Balance Rewards, with some 88.2m active members.

In addition to third-party brands, the group markets its own private label products in several different categories under the W Brand. In 2011, the group began expanding its footprint in the mass beauty market by rolling out Duane Reade's Look Boutique beauty store concept in other cities across the US. The group has several private label brands of its own including Well at Walgreens, NICE! and Delish. Even before the merger with Alliance Boots, US stores had been selling some of the British group's private label brands, including No 7 cosmetics, Botanics natural skincare and Liz Earle premium skincare. Much of the group's private label beauty and healthcare manufacturing was sub-contracted in 2017 to French group Fareva, who also acquired Alliance Boots' exisiting manufacturing facilities in Europe.

Although the merged group inherited the Alliance Healthcare wholesale network in Europe and China, all US supplies to Walgreens outlets come from AmerisourceBergen under a contract that currently runs through 2026. This partnership is secured by a 26% shareholding in AmerisourceBergen acquired by WBA in 2016. In 2018, the group was revealed to have made an approach to acquire the shares it doesn't already own in AmerisourceBergen.

Fighting competition from the likes of Wal-Mart, Walgreens has also diversified into broader healthcare solutions. It opened its first "convenient care" walk-in clinics, operated by nurse practitioners, in 2006 and a year later acquired rival company Take Care Health Systems. These form the core of what is now Walgreens Health & Wellness, which operates clinics at around 400 existing store outlets, as well as more than 370 corporate worksite locations as well as specialised home care clinics. These offers general medical services ranging such as health diagnosis for minor ailments, flu shots and blood tests. Another division, Walgreens Health Services, provides pharmacy benefits management and home care services, including mail order and internet prescriptions. The latter business was boosted in 2017 by a strategic alliance with rival PBM Prime Therapeutics. These operations all fall under the heading of the group's Retail Pharmacy USA segment. Combined revenues were $87.3bn in ye 2017.

In addition to its US presence, Walgreens Boots Alliance controls another 4,700 retail pharmacies across 10 international markets. More than half are in the UK & Ireland, under the Boots brand, but there are also outposts of Boots in Thailand, Norway, the Netherlands and Lithuania. The group also operates a sizeable chain of retail pharmacies in Mexico under the Benavides banner, and in Chile as Ahumada. Combined sales were $11.8bn in ye 2017. Unlike the US stores, the majority of sales in international pharmacies - 65% in ye 2017 - came from general retail rather than precriptions. Pharmaceutical Wholesale contributed a further $21.2bn. See Alliance Boots for more.


For the year to August 2011, group revenues rose 7% to a record $72.18bn, marking the 37th consecutive year of record sales. That growth run was broken a year later with a slight decline, followed by a new record total of $72.22bn for the year to 2013. Net earnings for ye 2013 rose by 15% to $2.45bn. Essentially all revenues are currently generated in the US. A Mexican subsidiary, Sanborn's, was sold in the 1980s. For the year to August 2015, revenues soared 35% to $103.44bn as a result of the consolidation of Alliance Boots, while net earnings more than doubled to a record $4.22bn.

Revenues for the year to 2016 rose by a further 13% to $117.35bn. Comparable net earnings were impacted by exceptional gains in the prior year, dipping marginally to $4.19bn. However operating income excluding exceptionals jumped almost 30% to over $6.0bn. US retail pharmacy operation contributed revenues of $83.8bn.

For the year to Aug 2017, revenues edged up slightly to a new high of $118.21bn. However a steeper rise in costs prompted another decline in net earnings to $4.08bn. The US accounted for 74% of revenues, the UK for 11% (or $12.6bn) and Europe for most of the rest.


Former McDonald's CEO James Skinner is executive chairman of Walgreens Boots Alliance, but many of the other senior executive positions have been taken by former Alliance Boots managers. Gregory Wasson retired as president & CEO of Walgreens following the buyout of the remaining Alliance Boots shares. He was succeeded as CEO by Alliance Boots' Stefano Pessina, who now controls over 16% of the merged group's equity.

See Adbrands Account Assignments for Walgreens marketers


The business was founded in 1901 by Charles R Walgreen in Chicago, and grew rapidly after 1910 when Walgreen began to serve hot food alongside the milkshakes and sodas traditionally offered by drugstores. At first all the food was cooked at home by Walgreen's wife and delivered to his two stores, but as its popularity grew, more and more stores opened to serve demand. By 1920, Walgreen owned 20 stores in and around Chicago, but the business boomed over the following decade, growing to 525 locations by 1929. Among other innovations were America's first malted chocolate milkshakes, introduced in 1922.

At the same time, Walgreen expanded its range of products to include private label over-the-counter remedies, and even golf balls, under the "Peau Doux" (or "Po Do") name. The foodservice business later evolved into restaurant chain Wag's, but this was sold in the 1980s, although some stores still sell fresh coffee and other light refreshments. In the 1990s, in a further repositioning, the company began moving its outlets out of shopping centres and onto "Main-and-Main" street corner locations. Founder Charles R Walgreen died in 1939, but management of the business was inherited by his son Charles Walgreen Jr, and subsequently by other family members. The last direct connection to a member of the founding family ended in 2010 when chairman emeritus Charles "Cork" Walgreen, the founder's grandson and himself a former CEO of the company, retired from the board.

Last full revision 29th November 2017

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