Walgreens Shuttering 1,200 Stores: What to Know
The list of major retail chains closing locations is continuing to grow as convenience store and pharmacy giant Walgreens announces plans for mass closures across the country.
During an earnings call on Oct. 15, the company said it was planning to further prune its footprint by shuttering approximately 1,200 stores in the next three years. The first 500 closures are slated for fiscal year 2025, which began in September. The company did not share where the impacted stores are located.
The closures are part of the company's turnaround efforts as it struggles with challenges like slow spending and low drug reimbursement rates, according to Reuters.
In a statement shared with Eat This, Not That!, Walgreens said its retail pharmacy business is central to its "go-forward business strategy," adding that increased regulatory and reimbursement pressures are weighing on the company's ability to cover the costs associated with rent, staffing, and supply needs.
"It is never an easy decision to close a store. We know that our stores are important to the communities that we serve, and therefore do everything possible to improve the store performance," the statement reads. "When closures are necessary, we will work in partnership with community stakeholders to minimize customer disruptions. We intend to redeploy the majority of our team members from those stores that we close."
In June, Tim Wentworth, CEO of parent company Walgreens Boots Alliance, shared that Walgreens will shutter a "significant portion" of underperforming stores over the next three years. While the exact number wasn't revealed, the company said about 25% of its stores were underperforming.
Walgreens currently operates more than 8,000 stores in the U.S. and about 6,000 are profitable, according to Wentworth.
"Fiscal 2025 will be an important rebasing year as we advance our strategy to drive value creation," Wentworth said in an earnings release. "This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term."
Walgreens reported a $3 billion loss during its last quarter, while sales increased by 6%.
This isn't the first time Walgreens has announced mass closures. In June 2023, the company shared that it would close 450 locations—150 in the U.S. and 300 in the United Kingdom—by the end of Aug. 2024.
Walgreens is one of several pharmacy chains that are struggling. Earlier this month, CVS announced that it's laying off approximately 2,900 employees as part of a cost-saving plan. In 2021, the pharmacy chain shared that it would shutter 900 locations in the next three years. Meanwhile, Rite Aid recently emerged from bankruptcy after closing more than 520 locations since the filing in Oct. 2023.
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