Walgreens is targeting to close approximately 1,200 stores over the next three years, with 500 of those closures happening in the 2025 fiscal year, the drugstore company told Fast Company.
In June, Walgreens said it would close a substantial number of its 8,600 U.S. stores, saying a quarter of its locations were unprofitable.
“This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” said Walgreens Boots Alliance CEO Tim Wentworth in a company statement.
On Monday, Walgreens Boots Alliance, Inc. approved a plan to “optimize its footprint and close underperforming stores, primarily in the U.S., to align with evolving demographic trends and . . . respond more effectively to shifts in consumer behavior and buying preferences,” according to a filing with the Securities and Exchange Commission.
Like many drugstore chains, including CVS and Rite Aid, Walgreens’ store closings come as it struggles with online competition from Amazon and decreased profits from prescription drugs due to lower reimbursement rates. Rite Aid, the nation’s third-largest stand-alone pharmacy chain, filed for bankruptcy last year and reportedly closed 400 to 500 of its approximately 2,200 stores.
Walgreens has also been plagued by pharmacist walkouts over work conditions. Meanwhile, it has attempted to combat inflation by slashing prices, but it hasn’t been enough to lure consumers back into stores.
Walgreens was once a staple in many towns and cities in the U.S. Now, these store closings could create so-called pharmacy deserts, limiting access to medicine and essentials in some communities. Researchers found pharmacy closures increased health risks in older adults, who were less likely to take medication.
Despite the challenges, Walgreens narrowly beat fourth-quarter earnings estimates and was mostly in line with expectations. Its shares (WBA) rose about 10% in midday trading on Tuesday, but are still are trading at a 30-year record low.
