In a sudden, surreal twist, Walgreens recently announced that it'd be closing many of its U.S. stores. Per CNN Business, Walgreens made this decision in an effort to "reset." While a concrete number wasn't disclosed, Walgreens' CEO, Tim Wentworth, told analysts "changes are imminent." This evidently includes roughly 25% of Walgreens' 8,600 locations. Wentworth also mentioned, in consideration of some locations' unprofitability, that the strategic review of the company will "include the closure of a significant portion of these underperforming stores."
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"We are at a point where the current pharmacy model is not sustainable and the challenges in our operating environment require we approach the market differently."
In an interview with the Wall Street Journal, Wentworth stated the closures would focus on locations that aren't profitable, too close to each other, or stores struggling with theft. Reportedly, the closures will take place over the next three years. If performance isn't up to speed by then, additional closures will be considered.
This news comes after Walgreens' plummeting shares. The shares fell 20% to its lowest level in decades for the company. "We continue to face a difficult operating environment. Including persistent pressures on the US consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins," Wentworth said in a press release. "Our results and outlook reflect these headwinds."
Additionally, Wentworth stated that shoppers are "becoming increasingly selective and price sensitive on their selections." He predicts that the "operating environment [will] remain challenging" in the U.S. and doesn't "expect an improvement."
Walgreens Is Shutting Down Many Of Its United States Locations
The collapse of #walgreens has been unlike anything I've ever seen in big retail.
It's down 24% today and has now lost 80% of its value in under 5 years.
This is America's largest pharmacy chain .. with over 8,500 stores & more than 300,000 employees.
Simply insane. pic.twitter.com/alOmhLWKkO
— Brian Sullivan (@SullyCNBC) June 27, 2024
Honestly, I'm dumbstruck by the prospect of Walgreens not existing anymore. I realize the company is likely a ways away from that, but for all these brands and companies I've known for my entire life to finally collapse in on themselves is beyond belief.
"But, inflation!" A valid response, yeah. But these are companies who, supposedly, should be able to read the proverbial tea leaves better than anyone else. The fact that things have gotten so terrible -- even for formerly thriving businesses -- speaks volumes about our priorities. Who knows? Maybe these failures and collapses will lead to meaningful change in the near future.
