CENTRAL VALLEY – Walgreens, the country’s largest pharmacy chain, announced that it will close 1,200 stores over the next three years, including about 500 stores in 2025.
Walgreens has multiple stores in Fresno and Tulare counties, including Reedley, Kingsburg, Selma, Sanger, Dinuba and Visalia. In an Oct. 15 email to the Times, Jennifer Cotto, Walgreens’ media specialist, said the company is not providing the names of stores slated for closing at this time.
The announcement comes on the heels of other pharmacy chains taking similar action. CVS Pharmacy announced it will close 900 stores. Rite Aid filed for Chapter 11 protection in October 2023. Since then, the chain closed multiple locations, leaving it with about 1,300 stores.
In the announcement, Tim Wentworth, Chief Executive Officer of the Walgreens Boots Alliance (WBA) – the parent company of Walgreens – put a positive spin on the announcement.
“Our financial results in the fiscal fourth quarter and full year 2024 reflected our disciplined execution on cost management, working capital initiatives and capex reduction,” he said. “In fiscal (year) 2025, we are focusing on stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow and continuing to address reimbursement models to support dispensing margins and preserve patient access for the future.”
Staying competitive and remaining relevant to shoppers has been a challenge for drugstore chains. Amazon and other online outlets have cut into the prescription medicine market. Online retailers can typically offer better prices for the same drugs.
Theft is also a factor why retail pharmacies are struggling. While it is true smash-and-grab mobs usually target jewelry and high-end stores, retail theft in the pharmacy space continues to cut into profits.
In January 2023, Walgreens CFO James Kehoe said that loss shrink – a retail term for lost inventory, either due to theft or mismanagement – said that gangs did target locations for beauty products. Still, Kehoe said that shrink loss in 2023 represented 2.5 to 2.6% of sales, which was lower than the 3.5% recorded in 2022.
Walgreens’ announcement was included in the company’s fiscal year (FY) 2024 earnings report, which was published on Oct. 15, 2024. The 1,200 store closures include the 300 locations Walgreens announced in June that it was closing due to subpar performance. The company described the closures as part of the Transformational Cost Management Program.
With the company closing 300 underperforming stores, it stands to reason Walgreens will prioritize closures based on performance.
WBA operates the company’s approximately 8,500 locations in the U.S. WBA published the earnings report, which contained conflicting data on the chain’s economic performance. For example, according to the report, fourth quarter sales increased 6% year-over-year to $37.5 billion. But the fiscal year 2024 loss per share was over $10, which was an increase of over 180% compared to the same period last year.
The company said fourth quarter results were in line with expectations.
