DEERFIELD, Ill. » Walgreen Co., which entered the Hawaii market late last year, says it hopes to cut $1 billion in annual costs by 2011 and will cut its capital expenses next fiscal year.

But the company told investors at its analyst meeting those cuts will cost the drugstore chain between $300 million and $400 million in fiscal 2009 and 2010.

The company says it wants to align its costs to its strategies and make itself more of a retail destination for families looking to save.

Walgreen says it'll reduce corporate overhead and work throughout all its stores, and save through an effort to reduce the cost of filling prescriptions. It plans to slow its store growth to free up capital.

The company expects to spend $1.8 billion on capital investments next fiscal year. That's less than the $2.2 billion it spent in fiscal 2008.