Walgreens, one of the largest pharmacy chains in the U.S., is set to close around 1,200 stores over the next three years. The company is doing this as part of a plan to cut costs and improve business. The first 500 stores will shut down in fiscal year 2025.
This move is part of a “turnaround” effort led by CEO Tim Wentworth, who took the job last year. Wentworth said in a statement that this process will take time, but he is confident it will bring benefits for both the company and customers in the long run.
The 1,200 stores represent about 13% of Walgreens’ total U.S. locations, which numbered over 8,700 as of last year.
Challenges for Walgreens and Other Drugstores
Walgreens is facing many challenges, including declining sales and tough competition from online retailers like Amazon. The company also struggles with lower payments from middlemen who handle prescription drug reimbursements.
Other drugstore chains, like CVS and Rite Aid, are also dealing with similar problems. CVS has laid off thousands of workers, while Rite Aid has closed hundreds of stores after filing for bankruptcy last year.
In addition to Walgreens, several other major retailers have faced financial difficulties and store closures since the COVID-19 pandemic, including Bed Bath & Beyond, Sears, and J.C. Penney.
Despite these issues, Walgreens reported a rise in revenue last year, with sales in its retail pharmacy sector increasing by 6.5% in the fourth quarter.