The Walgreens plans to close five locations in Los Angeles and Orange counties in the coming weeks. This could result in at least 93 unemployment as struggling retailers stay ahead of the downsizing, which sees around 1,200 closures nationwide.
The pharmacy chain will shutter stores in Whittier, downtown Los Angeles, Orange, Placentire and Stanton, according to a notice filed with the California Employment Development Department.
Store closures lead to layoffs for a variety of employees, including pharmacists, pharmacy technicians, cashiers, store managers, and inventory experts.
Last month, a top executive at Walgreens said the company had an up 52% increase in “Shrink.” He said this is an industry term that refers to a loss of stock that cannot be considered through sales or other legitimate means.
Tim Wentworth, CEO of parent company Walgreens Boots Alliance Inc, said anti-theft measures, including locking items behind the glass siege, have reduced sales.
The Southern California-affected Walgreen location will be closed between March 20th and March 27th. Layoffs vary from 8-27 employees per location.
Marty Maloney, director of media relations at Walgreens, cited the growing pressures of regulation and refunds as key factors contributing to the decision.
“Closing a store is not an easy decision,” said Marony. He told the Los Angeles Daily News.
“Our stores know that it is important to the community we serve, so we do everything possible to improve our store's performance.”
Malone added that the company “works in partnership with community stakeholders to minimize customer disruption.”
Walgreens, one of the largest pharmacy chains in the United States, has been tackling financial difficulties in recent years. This is exacerbated by lower foot traffic, increased labor costs and lower prescription drug rebates.
Over the past five years, the stock price of parent company Walgreens Boots Alliance Inc. has plummeted by a whopping 82%.
In July 2015, the stock reached a north high of $90 per share. As of Wednesday morning, it was trading at just $9.36 per share.
The Covid-19 pandemic initially increased revenues due to vaccination and testing demand, but sales softened while operating costs were high as the crisis waned.
The company is also overwhelmed by legal settlements related to opioid litigation.
Walgreens, along with other major pharmacy chains, agreed to pay billions of dollars for settlement after being accused of contributing to the opioid crisis by failing to properly monitor the distribution of prescription painkillers.
In response to these financial tensions, Walgreens announced last year plans to close low-performing stores across the country.
The company has not revealed the exact number, but industry analysts estimate that hundreds of locations can be closed.
In a revenue call in January, Walgreens CEO Tim Wentworth showed that store closures and operational restructuring are part of a broader strategy to streamline costs and improve profitability. Ta.
Walgreens is not just among pharmacy retailers struggling amid changing consumer behavior, rising operating costs and legal challenges.
Rite Aid, which filed for Chapter 11 bankruptcy in late 2023, has already announced the closure of more than 100 stores nationwide, including 31 in California.
The company has attempted to restructure its debt while dealing with its own opioid-related litigation and sales declines.
Walgreens' main competitor, CVS, is in the midst of a strategic downsizing plan.
In 2021, the company announced it would close 900 stores in three years as it focuses on expanding its healthcare services and digital presence.
Like Walgreens, CVS is facing reduced walking paths and rising costs, urging them to reassess the profitability of certain locations.
Beyond the pharmacy sector, traditional brick and mortar retailers are also struggling.
Major brands such as Bed Bath & Beyond, Family Dollar and Macy's have closed stores in recent months due to declining in-store sales and increased competition from e-commerce platforms.
The wide range of retail industries have seen a shift towards online shopping and same-day delivery services, making it increasingly difficult for physical stores to remain profitable.
The closure of Walgreens stores in Southern California could have a major impact on local communities that rely on these locations, especially for important medicines and everyday household items.
In some areas, Walgreens serves as one of the few easily accessible pharmacies, especially for seniors and individuals with limited transport options.
