Here's why Walgreens is doing something brilliant as retailer expands use of prescription filling robots

Walgreens is expanding the number of stores served by its micro-fulfillment centres to fill thousands of prescriptions for patients who take medications to manage or treat diabetes, high blood pressure or other conditions. 

It first rolled out the MFCs  in 2021, but paused expansion in 2023 to focus on gathering feedback and improving performance at existing sites. It now plans to have its 11 MFCs serve more than 5,000 stores by the end of the year, up from 4,800 in February and 4,300 in October 2023. As of February, the centres handled 40% of the prescription volume on average at supported pharmacies.

This is the biggest opportunity out there for Walgreens and Sycamore Partners, according to Brittain Ladd, a supply chain consultant and former Amazon executive.

In a LinkedIn post, he notes that, in 2015, Walgreen's market value was $100 nillion. In 2019, the value of the company had decreased to the point where KKR made an offer to acquire it or $77 billion. In March, Walgreens agreed to be taken private by Sycamore Partners for $10 billion.

Walgreens currently has more than 310,000 employees globally and 12,500 retail pharmacy locations across the US, Europe and Latin America.

Ladd comments: "Like CVS, Walgreens has shifted from opening new stores to closing hundreds of underperforming locations to shore up profits. Both companies are racing to stay relevant as online retailers lure away customers and patients increasingly opt for fast home delivery over traditional pharmacy visits. Sycamore Partners claims they’re confident in Walgreens pharmacy led retail store model. Bad idea. Walgreens must go direct to customers and minimise the use of their stores. Will it happen?"

"Walgreens is doing something brilliant that, if leveraged properly, will transform the company - it is expanding the use of MFCs, which use robots to fill thousands of prescriptions for patients who take medications to manage or treat diabetes, high blood pressure and other conditions. That translates to around 16 million prescriptions filled each month across the different sites."

He added: "Kayla Heffington is in charge of the MFCs, and Rick Gates is the Chief Pharmacy Officer for Walgreens; they are doing a fabulous job. Note to Sycamore Partners. Do the following: Invest capital to open more MFCs, and fund the ability of Walgreens to ship direct to customers vs having to fulfill orders to customers at the retail stores; Create a separate business unit: Fulfillment by Walgreens. Provide prescription fulfillment services to CVS, Amazon, hospitals, and other pharmacies; Partner with ViaTouch Media and create a pharmacy option for the convenience store industry, small to midsize grocery retailers, and independent grocers; Partner with Dollar General for a pharmacy option."

He concluded: "Sycamore Partners claims they’re confident in Walgreens' pharmacy led retail store model. I’m not. It should create a new and innovative business model to give it a competitive advantage. Think big!"

2025 RTIH INNOVATION AWARDS

Supply chain automation will be a key focus area at the 2025 RTIH Innovation Awards.

The awards, which are now open for entries, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering. 

For further information on the 2025 RTIH Innovation Awards, please fill in the below form and we will get back to you asap.