Walgreen (NYSE:WAG) is about to release earnings. Ponder this Bear Case Scenario:
Walgreen customers have enormous purchasing power. If Walgreen gets the price point wrong they lose immediately and big time. Walgreen needs to develop a compelling reason why consumers walk into their stores. You can get Advil anywhere.
Grocery stores and other mass marketers are offering the same type of product. Competition is fierce. Very little loyalty exists.
Drug benefit plans and various government entities are constantly squeezing prices and margins. At the present they have an overwhelming pricing power. Walgreen needs to become allied with this trend and not be in conflict.
George Gutowski writes from a caveat emptor perspective.