Walgreens joins mega-chains eyeing Southeast

Drug Store News, August 18, 1997 by James Frederick

Deerfield, Ill.--Accelerating its coast-to-coast expansion blitz, Walgreen Co. has revealed it will crack five new markets in the Southeast next year.

In line with a plan to open an unprecedented 280 new stores in 1998, the chain said it is developing its first drug stores in Charlotte, N.C.; Tidewater, Va.; Birmingham, Ala.; Lafayette, La.; and Jackson, Miss.

The expansion will add significantly to Walgreens' presence in the region by filling in part of the big void that exists for the chain between its near-400-store stronghold in Florida, its current store base in Virginia to the north and Arkansas and Louisiana to the west. This plan, combined with recent moves by CVS and Rite Aid, could have a marked impact on the once stable dynamics in the Southeast.

With its acquisition of Revco in May, CVS dramatically expanded its presence in the Southeast. Revco, which had acquired Big B prior to being bought by CVS, had a solid position in many Southeastern states including North and South Carolina, Georgia and Alabama. Prior to buying Revco, CVS's Southeast presence included roughly a dozen stored in Atlanta.

Rite Aid is also poised to become a powerful force in the South. The chain agreed to buy Harco and K&B last month, which would place it in four new markets, Florida, Louisiana, Mississippi and Texas, and strengthen its presence in Tennessee.

Commenting on its southeastern march, Charles R. Walgreen III, Walgreens chairman and chief executive, said, "With established markets in Louisiana, Arkansas, Tennessee, Richmond, Va., and Florida, we're taking the next step to bring Walgreens' drug stores to the Southeast."

The expansion will also give Walgreens entree to the fast-growing Charlotte market--which is already home to roughly 1.3 million people--and the Norfolk-Newport News metropolitan area in southern Virginia, with a population of more than 1.5 million.

Walgreens will enter Charlotte next summer with its first five stores, putting it head-to-head with market leader Eckerd Corp. and rival CVS, which entered the market via its acquisition of Revco. In the Tidewater region, where Walgreens will confront Eckerd and Rite Aid, four stores will open initially in summer 1998, according to chain spokesman Michael Polzin. Birmingham, which is home to nearly one million people, will see its first two or three Walgreens units at the same time. This will pit the chain against CVS, Eckerd and potentially Rite Aid, if that chain buys Harco.

Jackson and Lafayette will host their first Walgreens stores next spring, Polzin noted.

According to company spokesperson Yvette Venable, Walgreens does not currently operate in North Carolina, Alabama or Mississippi, and has just four units in Virginia. In Louisiana, Walgreens already has a sizable presence, with 48 stores operating in markets including New Orleans, Baton Rouge and Lake Charles.