WALGREENS locations nationwide have been smacked with closing signs just days after the retailer announced it would shutter 1,200 stores.
Retail pharmacies been pummelled by shrinking prescription reimbursement, persistent theft, rising costs and consumers who have strayed to online retailers or competitors with better prices.
Walgreens have announced the closure of 1,200 stores nationwide[/caption]
A Walgreens store at 26th and National in Milwaukee, Wisconsin will shutter on November 3, TMJ4 News reported.
“It is never an easy decision to close a store,” a Walgreens spokesperson told the outlet.
“We know that our stores are important to the communities that we serve, and therefore do everything possible to improve the store performance.”
The spokesperson cited “increased regulatory and reimbursement pressures” as factors that impacted Walgreens’ ability to cover costs associated with rent, staffing, and supplies at the 26th and National location.
They added: “When closures are necessary, like this in Milwaukee, 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.”
Meanwhile, a Walgreens location in Westwood, Massachusetts, posted signs advising customers of its closure on November 14, according to WCVB5.
“We really like these people. This is like coming to your next-door neighbor for a pharmacy,” customer Joseph Gearon said.
“Now we’ll have to go to Walpole to get them [prescriptions].
“It’s inconvenient.”
‘RETAIL APOCALYPSE’
Independent stores and major retailers have been forced to adapt their business plans as customers’ shopping behaviors have changed over time.
A phenomenon, that has been dubbed the retail apocalypse, has gripped the sector for more than a decade.
Industry experts believe that it has been fueled by the rapid growth of online shopping, malls becoming more unpopular, and the death of middle-class consumers, as reported by Vox.
And, the issues facing the retail sector were compounded when the Covid-19 lockdowns hit.
The “retail apocalypse” has seen renowned chains go to the wall, while thousands of stores have closed nationwide.
It comes after the retailer announced the mass closure of thousands of stores as the retailer’s CEO changes strategy.
Tim Wentworth, the CEO of Walgreens Boots Alliance, said Tuesday that the pharmacy chain would shut 1,200 stores over the next three years.
The company also narrowly beat Wall Street’s lowered estimates for fourth-quarter adjusted profit, and forecast fiscal-year earnings that were mostly in-line with expectations, Reuters reported.
Wentworth added he plans to fire a number of mid-level executives and put in place a $1 billion cost-cutting program.
This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term
Tim Wentworth
“At first blush, (the forecast) looks better than worst-case scenario,” Leerink Partners analyst Michael Cherny said.
News of the closures means that by 2027 one in seven Walgreens will have shuttered.
Around 500 of the stores scheduled for the chop will shutters over the next year, although their locations have not yet been revealed.
“This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” Wentworth said in a statement.
The closures were announced in June but the company had not disclosed the number of affected stores at that time. It had over 8,000 stores in the United States as of August 31 last year.
In the fourth quarter of its fiscal year 2024, Walgreens said it recorded impairment charges on the goodwill of home care provider CareCentrix and equity investment in China.
During the third quarter in June, Walgreens stock plummeted by more than 14% in the company’s financial results.
Walgreens has been forced to alter its outlook for profits for the year amid a “challenging” time for the pharmaceutical industry and a “worse-than-expected U.S. consumer environment.”
“We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins,” the CEO said in the report.
“Our results and outlook reflect these headwinds.”
