Walgreens plans to close about 1,200 stores by 2027 as brick-and-mortar pharmacies face increasing competition from online retailers.
The major pharmacy chain announced Tuesday that approximately 500 Walgreens locations will close in 2025, CNN reported.
Walgreens to close 1,200 stores nationwide, says 1 in 4 locations are unprofitable https://t.co/5uHGvWaVMq pic.twitter.com/zK11pltl9s
— New York Post (@nypost) October 15, 2024
The announcement follows Walgreens CEO Tim Wentworth’s June announcement that the company would close 300 underperforming stores. At that time, shares of Walgreens fell more than 20% after reports of fiscal third-quarter earnings.
Walgreens has reported stronger-than-expected since then, with a 6% revenue increase compared to the same quarter in 2023, according to the outlet. However, the company suffered a $3 billion loss, primarily due to a write-down of the Chinese pharmaceutical chain CareCitrix.
Walgreens’s latest store closures are “emblematic of a company that is in trouble and trying to course correct,” Neil Saunders, a retail analyst and the managing director at GlobalData Retail, told CNN. (RELATED: Major Convenience Store To Shut Down 450 Locations)
“Walgreens spent years building its business through acquisitions and neglected the fundamentals of its stores and its retail operations,” he said. “That has pushed a lot of outlets into a position where they are losing sales and are not generating a return.”
Walgreens stock is down roughly 70% on the year, the outlet noted.
The drugstore chain reduced prices on more than 1,000 items in May in an effort to attract consumers worried about inflation, according to the outlet.
Other drug stores, including CVS and Rite Aid, have faced similar market struggles and responded with cost-cutting measures. CVS announced this month that it would lay off around 2,900 employees as part of a $2 billion initiative to reduce costs.