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Walgreen Co. Message Board

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  • bananafana4friend bananafana4friend Jun 26, 2008 9:11 PM Flag

    High fuel cost affect earnings

    I disagree. They can't raise their prices on the RX part of their business as there is not fuel adjustment clause in the contracts that I know of. They have to be careful raising their prices on the OTC side as if they get too high the customers will go to the wallys of the world. Further there will be a lag between the energy cost increase and the time they react to the increase. So they will lose a little margin there. Electricity and nat Gas which is still over $12/mmbtu up from 8 a year ago and 5 two years ago and 3 4 years ago has hurt them some already. As energu costs go up they will be at more and more of a disadvantage as they have a small footprint to cover the costs where the mass boys have large ones to divide the cost increase.

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