Walgreens Boot Alliance
Walgreen is following in the paths of CVS. Walmart
Pharmacies are also aware that a long-term threat to their business models is younger people who are just as comfortable getting their prescriptions online. It's long been rumored that Amazon
Typically, pharmacies have had retail operations, where they sell products at a higher markup. Recently, they have been cutting back and offering adjacent health services like eyeglasses, hearing aids, and shipping offices. Again, younger people are less likely to go shop for something at a pharmacy that they could get online for a lower price and more convenience.
Following CVS
In some ways, the plan mimics CVS
Following CVS's purchase of Aetna, CVS is increasing its investment in this concept by building HealthHubs which will allow for treatment for all types of chronic care conditions like diabetes, arthritis, and heart disease. Of course, another benefit of this plan is that it feeds into greater sales for CVS's home and health products as well as its pharmacy which remains the primary driver of its business.
WBA
Walgreen's stock has been an underperformed. In fact, it's one of the few stocks that are lower than its March low. In contrast, the S&P 500 is 46% higher. WBA is flat over the same time period.
This is not a new development. The stock topped out in late-2015. And since then, it's trended lower making lower highs and lower lows. One explanation is that the company's costs are basically the same, but it's losing its leading position in the pharmacy business to online competitors, Costco, Walmart, and Target. By combining medical services, Walgreen's is hoping that it'll help its pharmacy business as well.