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need all that space when the war comes to an end,” objected Everett
Dirksen of Illinois. “What will we do with the extra space?”74 The honor-
able Mr. Dirksen needn™t have worried.
In September 1941, while President Roosevelt dithered over where the
building should go, the army engineers started digging without him. The
rush job never relented, resulting in an accident rate 400 percent higher
than the era™s average for such large public projects. Three hundred archi-
tects worked their slide rules, completed their calculations, and pushed
their pencils; but they still couldn™t keep up with the construction work-
ers. When one architect asked fellow architect Alan Dickey, “How big
should I make that beam across the third floor?” Dickey replied, “I don™t
know. They installed it yesterday.”75
By early 1943, the world™s biggest building had been finished in little
more than a year. But it cost $87 million”two and a half times the prom-
ised budget”and “on the day it was finished,” Brinkley wrote, “it was al-
ready too small.” Whereas the building had been designed to house 35,000
employees, 40,000 set up shop there in the first year alone.
Stories of the confusion that the colossal structure created among its
visitors became running jokes. “One woman,” Brinkley wrote, “was said to
have told a guard she was in labor and needed help in getting to a mater-
nity hospital. The guard said, ˜Madam, you should not have come in here
in that condition.™ ˜When I came in here,™ she answered, ˜I wasn™t.™”76
Of the various drugstore chains that submitted bids to become the
Pentagon™s official pharmacist, only Walgreens proposed to funnel all prof-
its from the store back to the Pentagon Post Restaurant Council, which su-
pervised the building™s food service. Perhaps trying to make a dent in the
$48 million construction budget overrun, the Pentagon wisely accepted.
The War Department weekly, The War Times, stated two years later that
Walgreens™ “attitude was so patriotically generous that no competitor
could possibly better it. Mr. Walgreen felt that since the people at the
Pentagon are War Department workers, he would prefer to operate his
store on the concourse entirely without profit to his company.”77
The Pentagon store was Walgreens™ only opening in 1943, but it is hard




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nothing to f ear 137

to imagine a Walgreens outlet making a bigger impact than that franchise,
which operated successfully well into the 1980s.78
Like the rest of the country, Walgreens didn™t flourish during the war
years, but it survived”and emerged stronger than before. Chuck
Walgreen identified many of the reasons for the chain™s durability in the
company™s 1942 annual report: “We are fortunate in the wide diversity of
the goods we stock, in the probable availability of most of them, and in
that our sales effort can be effectively varied by advertising and display, all
of which adds up to a high degree of flexibility and, hence, stability.”79
When the war ended, Walgreens was alive and well. Just as other com-
panies felt fortunate to emerge from the Depression still standing, they
were content”even lucky”to survive the war. Not Walgreens. From
1941 to 1945, net profit remained stable while the chain™s sales jumped
from $83.7 million to $119.2 million, then soared to $141.4 million in
1946”a leap of 72 percent in five very difficult years.
When the war ended, Walgreens was ready.



where everyone meets

At a time when people often found themselves in strange cities and towns
across the country”for military training, on scheduled leave, or to fill va-
cancies for badly needed help”Walgreens™ familiar logo, central loca-
tions, and friendly surroundings served as meeting places a thousand times
every day.
“I remember my girlfriends saying, ˜When we get old enough, we™ll
stand on the corner in front of Walgreens on State and Randolph and pick
up sailors,™” recalled Vivian Bosi, who grew up in the Chicago area before
moving to Escondido, California. “The Great Lakes Naval Station was
nearby. All the girls did that; they™d sashay up and down the sidewalk in
front of Walgreens, select the sailor they wanted, pair up, go inside to the
soda fountain, flirt, talk, and then go to the Chicago Theater. It was tradi-
tion.” Said Arlene McCarty,




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138 america™s corner s tore

On July 2, 1942, I went into the store at State and Randolph in
Chicago with some friends. Seated at a table nearby was a group of
sailors. We struck up a conversation and learned they were survivors
of the aircraft carrier Lexington, recently sunk in the battle of the
Coral Sea. They were in Chicago to attend diesel school at Navy
Pier. On Valentine™s Day 1944, I married one of these sailors, and we
had 53 years together until his death in 1997. Three sons and eight
grandchildren added to the joy of those years. Now, each time I see a
new Walgreens store opening, I feel a tug of nostalgia and recall
many happy memories.80

Walgreens™ role as America™s meeting place extended right up to the
conflict™s final day. Everyone has seen the famous photo of the sailor dip-
ping the nurse on Broadway for an exuberant smooch on V-E Day, 1945.
There is still plenty of debate over the identity of the nurse”dozens have
claimed to be the recipient of that kiss, and it seems impossible to prove
who it really was”but there is no debating the backdrop for the iconic
image: the Walgreens drugstore on Times Square.
The war was over, and Walgreens was still there.




TLFeBOOK
4
CHAPTER




the postwar
era: 1945“1970




the power era


T he end of World War II ushered in an era of renewed confidence, an
era when previously impenetrable boundaries were being shattered
every year. Chuck Yeager piloted a plane to a record speed of 1,600 miles
per hour, more than twice the speed of sound; Dr. Jonas Salk found a polio
vaccine; and Jackie Robinson dismantled the color barrier in sports for
good in 1947. (Another baseball player, a former war hero named George
Bush, played first base for Yale in the nation™s first College World Series
the same year; Yale lost 8 to 7 to Cal-Berkeley.)
139




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140 america™s corner s tore

Sparked by the GI Bill and fanned by good times, the University of
Michigan™s student body”mirroring others around the country”
expanded from 20,000 enrollees in 1951 to 41,000 in 1968.1 Those num-
bers included Cork Walgreen, who graduated from Michigan™s College of
Pharmacy in 1958.
Like the rest of the country, Walgreens had put most of its dreams on
layaway during the Great Depression and World War II and now longed to
satisfy 15 years of pent-up ambitions. Americans wanted to buy up every
available refrigerator, dishwasher, and clothes dryer, while Walgreens
sought to expand the chain, to improve the working conditions for phar-
macists, and to try some bold new strategies, none of which was possible
with the shortages of materials, workers, and time that the previous 15
years had seen.
Walgreens celebrated the country™s hard-won peace and prosperity by
putting on an elaborate nationwide radio show that it could never have
justified during the war. But even in the war years, Walgreens™ commit-
ment to radio advertising was impressive. The company spent roughly
$100,000 in 1940, doubled that by 1942, doubled it again the next year,
and poured an incredible $500,000 into radio spots in 1944. Walgreens ad-
vertising executives went a step farther on June 17, 1945, when they put
together a one-hour show called “A Walgreens Birthday Party,” the com-
pany™s fourty-fourth, taped in the 2,500-seat Los Angeles Theater.
Radio critic Adele Hoskins reported in the Chicago Daily News that the
program marked “the first time in the history of radio that a sponsor will
supply a variety of talent on one show that looks like a roster of
Hollywood.”2 The roster included Bing Crosby, Bud Abbott and Lou
Costello, and the Andrews Sisters and raised $2.5 million for war bonds
through the $1,000 admission price. (That year alone Walgreens had
helped sell some $20 million in war bonds to the company, to its employ-
ees through voluntary payroll deductions, and to its customers through
designated soda fountain booths in each store.3)
Happy days were here again.




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the pos t war era 141

mergers and acquisitions

Because Walgreens had the money but not the materials or manpower to
build new stores during the war, the company wisely salted away a portion
of its earnings every year, earmarking the extra $1.5 million for expansion
once the war had ended. In a postwar issue of the Pepper Pod, Chuck
Walgreen announced a new era of optimism when he declared, “Extensive
expansion is the keynote for 1946.”4
But Walgreens did not expand the number of stores greatly under
Chuck™s reign”only about a 20 percent increase during his three-decade
run. Instead, the company devoted its resources to refurbishing, replacing,
and supersizing its existing outlets and to branching out into new areas,
both physically and strategically.
Walgreens first dipped into its wartime nest egg to give its stores long
overdue facelifts, from remodeling floor plans to installing fluorescent
lighting.
By 1946, it was no longer possible to ignore that the company had fi-
nally outgrown its second headquarters on Bowen Avenue, despite four ex-
pansions over the previous 21 years. Chuck and company started building
a brand new corporate office at 4300 W. Peterson Avenue on Chicago™s
northwest side. Opened in 1949, the new headquarters™ 100,000 square
feet of usable space was more than enough to house all 640 central
employees, many of whom had been forced to work outside the old
headquarters.
Like so many other U.S. companies in the postwar era for whom diver-
sification was the buzz word, Walgreens dived headfirst into the brave
new world of mergers and acquisitions. In the spring of 1946, Robert
Knight received a call from Julio Lacaud, “a prominent investment
banker,” the Kogans wrote, to see if Walgreens might be interested in buy-
ing a slice of Sanborns, a popular chain of department stores in Mexico.5
The idea held more than a little appeal. When Walgreens bought
Sanborns in 1946, the Mexican “chain” consisted of just two “links,” with




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142 america™s corner s tore

annual sales of $3.5 million; but one of those two stores was Mexico City™s
hallowed House of Tiles, a three-story landmark completed by a Spanish
nobleman in the 1596. In 1903, a California pharmacist named Walter
Sanborn and his brother Frank opened their first store in the ground floor
of the eye-catching mansion and sold everything from handmade silver
jewelry to home furnishings, Oriental rugs, and original art in the store™s
own gallery. Sanborns also branched out into food service and built its
own manufacturing center to produce store-brand goods”enterprises
Walgreens knew a little something about.6
Despite the obvious risks of investing in a foreign company, Walgreens
decided it was a move worth making and put up $613,000 to claim a 27
percent stake in the company. When the bet paid off, Walgreens increased
its share to 44 percent and expanded the chain into a half dozen other
Mexican towns.7
Encouraged by the success of its first major merger, Walgreens looked
south for more opportunities and found appealing ones in Puerto Rico and
Houston, Texas. Though Puerto Rico is a U.S. territory, which had 2 mil-
lion citizens in 1960, most of the inhabitants had never seen a big
American drugstore before Walgreens opened its first outlet there in
November 1960”at the same time presidential candidate John F.
Kennedy announced his plan for something called the Peace Corps.
The outlet proved to be an immediate hit, offering prices 15 percent
lower than local rates and the kind of selection previously available only
on the mainland. Chuck Walgreen promoted Puerto Rico native Andres
F. Ramirez, who had graduated from the University of Mississippi and
worked for Walgreens since 1951, to run the store, continuing Walgreens™
tradition of hiring local people whenever possible at its far-off stores to
maintain a common touch.8
It worked. Walgreens built up its Puerto Rico operation to seven stores
by 1971 and now operates over 50 stores on the island, the most successful
and rewarding expansion under Charles Walgreen Jr.™s leadership.9
Batting two for two, Walgreens was all ears when Houston™s Globe
discount department store company came looking for a buyer after it had
suffered a disastrous mishap in 1961. Stanley Danburg, the 32-year-old son




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the pos t war era 143

of the founder of the Danburg Department stores, had built two huge
Globe stores of over 100,000 square feet each and was building a third
when a fire burned through over $5 million of store inventory. In spite of
the setback, Danburg went through with the planned opening of the third
store but quickly found himself buried in debt.
Though the entire Globe “chain” consisted of only three stores, Chuck
Walgreen took the chance because all three stores were colossal boxes,
with much to teach Walgreens about discounting on such a grand scale.
Walgreens purchased the Globe corporation on May 17, 1962, for $3 mil-
lion in Walgreens stock.
Walgreens™ management team was humble enough to realize it had a lot
to learn about discounting, and also about the Globe managers, so it wisely
moved slowly with the new division. As vice president Cecil Campbell
said, “We have to learn to walk before we can run,” the very phrase the
company used to describe its approach with drive-thru pharmacies and

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