Walgreens plans to close about 1,200 stores by 2027 as brick-and-mortar pharmacies face increased competition from online retailers.
The major pharmacy chain announced Tuesday that about 500 Walgreens stores will close in 2025, CNN reported. reported.
Walgreens to close 1,200 U.S. stores, announces 1 in 4 stores 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 announcement in June that the company would close 300 unprofitable stores. At the time, Walgreens' stock price fell more than 20% following news of its third-quarter results.
Walgreens has since reported stronger-than-expected results, with sales up 6% compared to the same quarter in 2023, the outlet said. However, the company suffered a loss of $3 billion, mainly due to writedowns on Chinese pharmaceutical chain CareCitrix.
Neil Saunders, a retail analyst and managing director at GlobalData Retail, told CNN that Walgreens' recent store closures are “symbolic of a company that is struggling and trying to get back on track.” (Related: 450 major convenience stores to close)
“Walgreens spent years building its business through acquisitions and ignoring the fundamentals of stores and retail operations,” he said. “As a result, many dealers are losing sales and are being forced into a situation where they are unable to make profits.”
According to the outlet, Walgreens stock is down about 70% from a year ago.
The drugstore chain cut prices on more than 1,000 items in May to woo consumers worried about inflation, the media reported.
Other drugstores, including CVS and Rite Aid, are facing similar market struggles and cost-cutting measures. CVS announced this month that it would lay off about 2,900 employees as part of a $2 billion cost-cutting plan.
