Top executives at Walgreens lamented lost sales from putting products like toothpaste behind lock and key in an effort to crack down on rampant shoplifting plaguing pharmacy chains across the country.
“When you lock things up… you don't sell as much,” Tim Wentworth, CEO of Walgreens Boots Alliance, told investors on a recent earnings call.
He also said tackling retail theft is akin to “hand-to-hand combat” and that the anti-shoplifting measures the company has adopted are “largely ineffective.”
Wentworth said Walgreens saw a 52% increase in “shrink” (an industry term for inventory losses that cannot be accounted for through sales or other legitimate means) after last Friday's earnings release.
Walgreens is currently exploring creative solutions to combat shrink without compromising the shopping experience, but Wentworth was vague on details.
This approach aims to balance security needs with consumer convenience and represents a shift from previous practices.
Retailers are using a variety of strategies to combat rising shoplifting rates, including increased security measures such as surveillance cameras, smart gates, and electronic tags, as well as locked display cases to store frequently stolen items. There is.
Companies are also training employees, using body-worn cameras, and working closely with law enforcement.
While these measures are aimed at reducing losses and improving safety, in some cases they lead to customer dissatisfaction and highlight the challenge of balancing security with a positive shopping experience.
Walgreens Boots Alliance's fiscal 2025 first-quarter results beat expectations, with adjusted earnings per share of 51 cents versus analyst estimates of 37 cents, and revenue up 7.5% to $39.5 billion. .
The higher-than-expected profits were due to moves by Wentworth and his management team, including closing about 1,200 unprofitable stores in the U.S. over three years to boost profitability and cash flow. It also includes plans to implement a $1 billion cost reduction plan.
The positive results caused a significant increase in the company's stock price and demonstrated investor confidence in its ongoing restructuring efforts.
Since January 1st, the stock price has increased more than 32%. WBA stock has fallen more than 77% over the past five years as consumers have turned to e-commerce.
