Walgreens is joining rival drugstore chain CVS Health in expanding home deliveries for prescriptions nationwide, as stores continue adjusting to a retail world made more consumer-friendly by online competition.
Walgreens said Thursday that it will partner with FedEx to deliver prescriptions as soon as the next day for a $4.99 fee, and it also is providing same-day deliveries in several cities including New York, Chicago and Dallas. The Deerfield, Ill., company started offering deliveries in several markets in October.
Walgreens and FedEx Corp. began a partnership last year where the drugstore chain started offering package drop-off and pickup services at several thousand stores.
Woonsocket, R.I.-based CVS Health Corp. also announced in June the expansion of a nationwide prescription delivery program. They also will deliver other items like allergy medicines, vitamins or household products.
The companies say their delivery services are faster options than mail-order prescription programs that have been around for years.
Retailers have been breaking out more customer-friendly services in recent years to hold Amazon.com at bay.
The online retailer offers same-day deliveries of goods typically sold in the front end of drugstores, or the area outside the pharmacy. That has hurt store sales for the major drugstore chains, which spent years building nationwide store networks to get closer to consumer homes. Walgreens Boots Alliance Inc. and CVS Health both run more than 9,000 U.S. locations.
Investors have been worried about a potential Amazon leap into the turf of drugstores, especially after watching the online giant dive into groceries with the acquisition of the Whole Foods chain. Amazon sent drugstore shares tumbling briefly in June when it announced the acquisition of PillPack, an online pharmacy that offers pre-sorted dose packaging and home delivery.
Several venture-backed startups also offer same-day prescription delivery or websites that allow customers to pay in advance for drugs and pick them up at a drugstore of choice.
In addition, Walgreens and Kroger have begun a pilot program at 13 Walgreens stores in northern Kentucky, near Kroger's Cincinnati headquarters. The program will offer Kroger Express, a selection of 2,300 products chosen using customer data.
The Kroger Express concept adds to Walgreens' limited grocery supply and includes the ability to order and pick up online Kroger orders at the pilot Walgreens stores.
Kroger also announced that 65 Chicago-area Walgreens will begin selling Home Chef meal kits.
"We are redefining the customer experience in a variety of ways through Restock Kroger, including innovative partnerships like our test-and-learn pilot with Walgreens. ... The Kroger Express concept creates easy access to our most popular Our Brands products through a fill-in grocery shopping experience for Walgreens customers, and our Home Chef Express meal kits provide customers with an on-demand solution for tonight's dinner," said Robert Clark, Kroger's senior vice president of merchandising.
Kroger and Walgreens first announced the pilot in October, hoping to merge Kroger's grocery services with Walgreen's pharmacy experience.
When the 13 Walgreens stores began the pilot, Kroger said the company would test the pilot for the next several months and determine how to move forward.
Information for this article was contributed by Tom Murphy of The Associated Press; by Robert Langreth of Bloomberg News; and by Holly Shively of Cox Newspapers.
Business on 12/07/2018