Walgreens, a big pharmacy company in the U.S., will close 1,200 stores in the next three years. The news was shared during a meeting about profits on October 15, 2024, and shows that another big store is reducing its number of physical locations.
Walgreens is making its stores more efficient as part of its plan to deal with money problems. Here’s everything you need to know about the closures and what they mean for customers, employees, and communities.
Why Is Walgreens Closing Stores?
Walgreens is facing several financial pressures that are driving the decision to reduce its number of locations. The company cited slow consumer spending, low drug reimbursement rates, and increased regulatory burdens as significant factors. These problems are making it hard for Walgreens to pay for rent, employees, and items in stores that are not doing well.
Reuters says Walgreens is making changes to focus on stores that make more money. The retail pharmacy business remains central to its “go-forward business strategy,” but regulatory and reimbursement pressures are weighing heavily on profitability.
Walgreens reported a $3 billion loss last quarter, although sales increased by 6%. To mitigate further financial losses, the company is aggressively closing underperforming stores and focusing on operational efficiencies.
How Many Walgreens Stores Will Be Closing?
Walgreens plans to close around 1,200 stores over the next three years, with the first 500 closures taking place during the fiscal year 2025, which started in September 2024. The company has not yet disclosed which specific stores will be impacted by the closures.
The decision comes after Walgreens’ parent company, Walgreens Boots Alliance, announced in June that it would shut down many underperforming locations. CEO Tim Wentworth indicated that about 25% of Walgreens’ 8,000 U.S. stores were underperforming at that time. While the company did not specify which stores would be affected, it emphasized the need to streamline operations.
The Impact on Employees and Customers
Store closures are always challenging for employees or customers, and Walgreens acknowledged the difficulty of the decision.
In a statement shared with the company expressed its commitment to minimizing customer disruptions and ensuring that communities continue to have access to essential pharmacy services.
Walgreens will work with people in the community to reduce the effect of closing stores. They will also try to move most employees from closed stores to other stores or jobs in the company.
For customers, the closures could mean fewer nearby options for filling prescriptions and purchasing over-the-counter medications. However, Walgreens’ emphasis on working with community leaders suggests that the company will try to ensure that critical services remain accessible, especially in areas with limited pharmacy access.
How Does Walgreens Compare to Other Pharmacy Chains?
Walgreens and CVS are big pharmacy stores that are having money problems and are closing some of their stores. CVS is cutting jobs & closing stores to save money.
Similarly, Rite Aid has been dealing with its financial challenges. The company recently emerged from bankruptcy after closing more than 520 locations since filing for bankruptcy in October 2023.
Like Walgreens and CVS, Rite Aid is struggling with changes in the healthcare industry, slow consumer spending, and shrinking reimbursement rates for prescription drugs.
What’s Next for Walgreens?
As Walgreens continues to navigate financial challenges, the company is focused on long-term value creation. CEO Tim Wentworth emphasized that fiscal year 2025 will be an “important rebasing year” as the company works to execute its turnaround strategy.
Walgreens is confident that these difficult decisions will benefit the company and its customers. Walgreens is trying to make more money and serve its customers better by shutting down stores that are not doing well & making its operations more efficient.
Conclusion:
Walgreens is shutting down 1,200 stores in the next three years because they are having money troubles. Even though this will impact employees and customers, Walgreens is still committed to working with communities to lessen any issues.
As CVS and Rite Aid, big pharmacy stores, have problems, Walgreens is closing some stores as part of a bigger trend in the pharmacy industry. Customers should know about which stores are closing and use the help Walgreens is offering during this time.