Facing mounting losses, the Deerfield, Illinois-based company Walgreensannounced on October 15 the planned closure of some 1,200 stores throughout the country over the next three years. As CNN’s Jordan Vallinsky wrote on Tuesday, “Walgreens will close approximately 1,200 locations as the pharmacy chain struggles to compete with online competitors and declining prescription drug payments. By 2027, approximately one in seven Walgreens currently open will close their doors. About 500 Walgreens will close their doors over the next year, the pharmacy chain announced Tuesday.
Vallinsky noted that “those closures represent a significant escalation from a few months ago, when the financially troubled company announced in June that it would close 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 he Washington PostAaron Gregg reportedalso Tuesday, that those 1,200 locations represent “about 9.5 percent of the drugstore chain’s 12,500 locations worldwide, although it was not immediately clear what percentage of U.S. stores would close.” Executives had considered closing many more sites: The company said in June that 25 percent of its retail locations were underperforming, making them candidates for closure. The first 500 closures will occur in the next 12 months,” he wrote. “Chief executive Tim Wentworth said the company will focus on ‘stabilizing’ its retail pharmacy business. “This change will take time, but we are confident it will produce significant long-term financial and consumer benefits,” Wentworth said. The store closures, which Walgreens called a ‘growth footprint optimization program,’ were announced Tuesday as part of the drugstore chain’s quarterly earnings report.”
He added that “Walgreens reported a net loss of $8.6 billion for the fiscal year ended Aug. 31 on total 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 cited GlobalData analyst Neil Saunders, who said the store closures are “emblematic of a company that is in trouble and trying to course correct,” and noted that it spent years building its business through acquisitions while neglecting aspects basics of retail business such as customer service. The company is left with many stores that do not generate a return on investment, Saunders told him.
What’s more, another 800 stores could be in danger of extinction 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 would occur during an earnings call in June. “Walgreens shares rose more than 12 percent in Tuesday trading following the news, indicating that the move was not a surprise, and even welcome, to investors,” he 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. Meanwhile, revenue increased 6 percent year over year to $37.5 billion.”
And Khemlani wrote: “Mary Langowski, the company’s president of U.S. healthcare, said the actions taken to date have focused on near-term shareholder value. For fiscal 2025, the company will focus on growing its core business lines, including pharmacies and specialty pharmacy services.”
AND an Associated Press journalist wrote Tuesday in an unsigned report published in us news, that “pharmacies that once occupied prime retail spaces in towns and cities across the country are in retreat. They have been hit by declining prescription drug reimbursements, persistent theft, rising costs and consumers shifting to online retailers or competitors with better prices. “The boost they received from leading 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, reduced to about 1,300 locations. As companies back away, they are raising concerns in many communities about access to health care and prescriptions. “Pharmacy leaders and analysts who follow the industry say smaller versions of these chains have a future in U.S. retail, but they are still trying to understand how that will play out.”
