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DEERFIELD, IL-Despite record sales and record store openings, Walgreens is reducing its new store openings by fiscal 2011, executives said at the company’s first quarter conference call.

Previously, the company had announced plans to reduce its planned store growth from 8% long term to 5% by fiscal 2001. That now has been reduced further to a projected 2.5% to 3% by 2011.

“The biggest reason for the change is that the economy continues to shift and change,” said Wade D. Miquelon, chief financial officer. “We may so more consolidation, so this gives us more flexibility. This is the single biggest value creation lever we can pull.”

The company will expand between 4% and 4.5% in 2010. In the last quarter, the company had opened 212 new units.

“We will continue to open new stores on the best corners and in the markets with the best returns,” said Gregory D. Wasson, president and chief operating officer. “We’re going to continue to invest, and find markets that make sense strategically.”

The move will save an additional $500 million in capital expenditures, some of which will be allocated to refreshing existing stores, including creating new merchandise presentations.

What will continue to expand is its Take Care Clinics and worksite health centers, which now total 661, and will have 800 locations by year-end.

Sales for the quarter rose 6.6% from the previous year to a record $14.9 billion, with comparable stores rising 1.7% in the quarter. Perhaps not surprisingly in the current economy, prescription sales rose 6.2%. Net earnings were $408 million, down 10.4% from last year.

Walgreens operates 7,035 locations (which includes 6,500 drug stores) in 49 states, the District of Columbia and Puerto Rico.

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