CVS Caremark Corporation (CVS): Is Walgreen Company (WAG) Running Out of Fresh Ideas?

In the Fortune interview, Wasson said he picked up a statistic showing that 60% of people don’t know by 10 a.m. what they’re having for dinner that night. He wants to have Walgreen be the place consumers turn to when they’re making those decisions as they’re running through the store to pick up their prescriptions.

I think that’s the fatal flaw in the plan. While the chain may be gaining share and it may see its pharmacy sales rising, lifted in no small part by the explosion of generic drug sales resulting from the pharmaceutical industry falling off the patent cliff, people just don’t pick up prescriptions every day. There’s just not enough of a public perception of Walgreen as a grocery store to make customers go there instead of Kroger, Safeway, or Wal-Mart. And since Express Scripts Holding Company (NASDAQ:ESRX) acquired mail-order drug service Medco, which has also implemented an auto-renewal service for prescriptions, the need to even visit a pharmacy is declining.

That explains why Walgreen needs new ideas to get people into its stores, but with the prospects that its results will wilt like day-old produce when it reports fourth-quarter earnings, I think the best prescription for investors will be to sit on the sidelines for a while.

The article Is Walgreen Running Out of Fresh Ideas? originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts.

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