Facing mounting losses, the Deerfield, Ill.-based Walgreens, on Oct. 15 announced the planned shuttering of about 1,200 locations nationwide, over the course of the next three years. As CNN’s Jordan Vallinsky wrote on Tuesday, “Walgreens is closing approximately 1,200 locations as the drug store chain struggles to contend with online competitors and declining prescription drug payments. By 2027, about one in seven Walgreens currently open will close its doors. About 500 Walgreens will close its doors over the next year, the drug store chain announced Tuesday.”
Vallinsky noted that “Those closures represent a significant escalation from a few months ago, when the financially struggling company announced in June it was shutting 300 underperforming locations as part of a multi-year optimization program under CEO Tim Wentworth. At the time, the company had said about a quarter of Walgreens stores were unprofitable, and the chain promised ‘imminent’ changes.”
And the Washington Post’s Aaron Gregg reported, also on Tuesday, that those 1,200 locations represent “about 9.5 percent of the pharmacy chain’s 12,500 locations worldwide, though it wasn’t immediately clear what percentage of U.S. stores would close. Executives had considered shuttering far more sites — the company in June said 25 percent of its retail locations were underperforming, making them candidates for closure. The first 500 closures will take place over the next 12 months,” he wrote. “Chief executive Tim Wentworth said the company will focus on ‘stabilizing’ its retail pharmacy business. ‘This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,’ Wentworth said. The store closures — which Walgreens called an ‘accretive footprint optimization program’—were announced as part of the pharmacy chain’s quarterly earnings report Tuesday.”
And he added that “Walgreens reported a net loss of $8.6 billion for the fiscal year ending Aug. 31 on overall sales of $147.7 billion. The company’s pharmacy sales in the fourth quarter increased 9.6 percent year-over-year, but retail sales decreased 3.5 percent.”
Gregg also quoted GlobalData analyst Neil Saunders, who said that the store closures are “emblematic of a company that is in trouble and trying to course correct,” noting that it spent years building its business through acquisitions while neglecting retail basics like customer service. The company is left with a lot of stores that aren’t generating a return on investment, Saunders told him.
What’s more, another 800 stores could be on the chopping block at some point, reported Anjalee Khemlani of yahoo!finance, on Tuesday. Khemlani noted that “The number had not been previously announced, but Walgreens indicated up to 2,000 store closures coming during an earnings call in June. Walgreens stock jumped more than 12 percent in trading Tuesday on the news — signaling the move was no surprise, and even welcome, to investors,” she wrote. “The company announced fiscal fourth quarter earnings in line with expectations, with a loss per share of $3.48 compared to $0.21 in the same quarter in 2024. Revenues, meanwhile, increased 6 percent year over year to $37.5 billion.”
And, Khemlani wrote, “Mary Langowski, president of US healthcare at the company, said the moves made to date have focused on near-term shareholder value. For fiscal year 2025, the company will focus on the growth of core lines of business, including the pharmacies and specialty pharmacy services.”
And a reporter from the Associated Press wrote on Tuesday in a non-bylined report published in U.S. News, that “Drugstores that once snapped up prime retail space in towns and cities across the country are in retreat. They’ve been battered by shrinking prescription reimbursement, persistent theft, rising costs and consumers who have strayed to online retailers or competitors with better prices. The boost they received from taking the lead on vaccinations during the COVID-19 pandemic has long since faded.”
That report went on to state that “Walgreens’ announcement Tuesday morning comes as rival CVS Health wraps up a three-year plan to close 900 stores and Rite Aid emerges from bankruptcy, whittled down to about 1,300 locations. As the companies retract, they raise concerns in many communities about access to health care and prescriptions. Drugstore leaders and analysts who follow the industry say smaller versions of these chains have a future in U.S. retail, but they're still trying to understand how that will play out.”
