In what is likely to mark a record-breaking year for store closures in the US, about 15,000 stores across the country are set to shut down in 2025 and hundreds of Walgreens locations are among them.
The pharmacy store chain has announced that 500 of its stores will close by 2025 as part of a plan to shutter 1,200 stores in the coming years. It comes as drugstore chains fail to avoid the economic downfall impacting major retailers including Macy's, Forever21, Kohl's and Dollar General.
Walgreens estimates that a quarter of its 8,700 stores in the US are not profitable. The company announced the closures despite its fiscal fourth-quarter and full-year earnings beating Wall Street's expectations.
CEO Tim Wentworth said the company was in the middle of a "turnaround" that would "take time". He said: "We are confident it will yield significant financial and consumer benefits over the long term.”
Drugstores have struggled to stay afloat amid shrinking prescription reimbursement, persistent theft, rising costs and consumers who have strayed to online retailers or competitors with better prices. The boost they received by taking the lead on vaccinations during the COVID-19 pandemic is now long gone.
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Walgreens' announcement of the closures back in October came as its rival CVS wrapped up a three-year plan to close 900 stores. Rite Aid also emerged from bankruptcy with a smaller presence of 1,300 stores.
Wentworth said that around 6,000 of its stores are still profitable and will provide Walgreens with a foundation to build on. “This solid base supports our conviction in a retail pharmacy-led model that is relevant to our consumers, and we intend to invest in these stores over the next several years,” he said.
