Friday, January 28, 2011

Earn Permission to Misbehave

Walgreens—America’s largest retail drugstore by location count—recently made two significant announcements about merchandise they’ll be adding:
  • They’re rolling out plans to carry fresh fruits and vegetables, frozen meat and fish, pasta, rice, beans, eggs, and whole-grain cereals. Walgreens is especially interested in making the additions in what they call “food deserts,” such as inner-city locations with few stores currently carrying fresh foods.
  • After last year’s company turnaround from a self-imposed ban of almost fifteen years on alcohol beverage sales in most stores, Walgreens says they’re adding a house brand beer selling for about 50¢ per can. Many Walgreens stores already sell the private label Southern Point wine at about $4 a bottle.
     Both moves can rightfully be considered as good merchandising decisions. Lots of general merchandise retailers are adding grocery sections, and Walgreens pointed out last year that CVS Caremark and Rite Aid—vigorous competitors—already have been selling alcoholic beverages in many of their stores.
     But as you’d expect, a number of stakeholders view the sale of low-priced alcohol as retailer misbehavior. When approving the Walgreens request for permits, the Omaha city council placed restrictions on single can sales. In an interview with the Wall Street Journal, Walgreens acknowledged that many local communities are concerned that the alcohol sales will boost crime rates. Walgreens announced they would not be selling fortified wines, hard liquor, or extra-large beer cans. They also say sales won’t be made by employees who are themselves underage and all employees will be instructed to sign off on their store’s alcohol sales policy at the start of each work shift.
     From a consumer psychology perspective—where in this case, those consumers are community stakeholders—one way to view the Walgreens announcements is as the retailer earning permission to sell cheap booze in low-income neighborhoods by showing that they’re going to help kids in low-income neighborhoods to be more healthy.
     And not only with the food. At about the same time, Walgreens also announced that they are lobbying state public health departments to approve their pharmacists administering a broad range of inoculations. Walgreens’ rationale is that there is a shortage of primary care physicians in many areas where a Walgreens store is located.
     Let all this serve as a reminder of the value in continually earning good will in your community to offset whatever local accusations arise that your business is misbehaving.

Click below for more:
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