Walgreens CEO says 'human interface' will help the chain beat Amazon

KEY POINTS

• Walgreens CEO Tim Wentworth told CNBC's Jim Cramer his retail pharmacy chain can rival Amazon because of its human-to-human interactions with customers and presence in communities.
• Wentworth said he thinks "human interface" will differentiate Walgreens from its competitors more so than speedy deliveries.

Walgreens CEO Tim Wentworth told CNBC's Jim Cramer his retail pharmacy chain can rival Amazon because of its human-to-human interactions with customers.

"We will beat Amazon because of the human interface that we offer in communities and neighborhoods, 8,600 locations today where you can come in if you actually are getting a drug that you want to talk about, if you have a health concern, if you want to get an over-the-counter product to go along with your drug," he said. "Those are the things that I think are going to differentiate us, not just the fact that we can do it in an hour," referring to Walgreens' same-day delivery service.

Wentworth said he loves Amazon, and the online retail giant has set the bar and driven innovation in the industry. Consumers have been "trained to expect better," he said, adding he is not sure if Walgreens would have the delivery service it does if it weren't for entities such as Amazon or Instacart. But he emphasized that its consumer presence is really what makes the company competitive against Amazon.

Walgreens' Thursday earnings report beat Wall Street's expectations, but the company narrowed its earnings guidance for fiscal 2024 to reflect a "challenging retail environment in the U.S."

Wentworth joined Walgreens in the fall of 2023 and has been working to push the company through a rough patch. Over the past few years, Walgreens' business has been hurt by decreasing demand for Covid products, low pharmacy reimbursement rates, competition from online retailers and discontent from pharmacy staff.

Wentworth detailed how his company plans to improve its pharmacy business, such as consulting with deans from pharmaceutical schools to "remap the workplace of the future in community pharmacy and then reengineer curricula to actually deliver candidates to that model." He also said Walgreens is decreasing pharmacists' "low-value work," such as pill counting, by using micro-fulfillment centers.

"We think designing the workplace differently, we think designing work differently, we think engaging with the community that's creating tomorrow's pharmacists in a way that's constructive and as a leader, are all going to position us to be able to have the workforce that we need to deliver what you would need when you come into the store," he said.

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