Mounting Pressures Push Walgreens to Close 700 Stores

There are a couple of branches that were struggling to stay afloat with costs and were seriously failing to meet expectations. As a consequence of this, the business will close the doors of the selected branches.

Many households have been affected by the rising cost of living, which has resulted in lower sales at stores like Walgreens.

Big names in different sectors like Toys”R”Us and Bed Bath & Beyond faced mounting financial struggles that eventually reached a point of no return, forcing these iconic companies into bankruptcy.

But customer spending habits have shifted quite a bit too over recent years. Household budgets have felt the strain of the pandemic, followed by inflation and a cost of living crisis. Every retail segment seems to be feeling the struggle.

Overlapping a little with the struggles of drugstores like Walgreens, restaurant brands targeted at older demographics like Cracker Barrel have faced extra issues as their customer base has become more cautious about going out and spending their money post-pandemic.

However, the struggle to survive these expensive times is even resulting in the possible closure of 700 UK stores.

These figures are consistent with the regularity filing that the company submitted.

This is far from the case. Many high-profile pharmacies have suffered extreme financial struggles recently, resulting in a slew of closures and worse.

CVS has managed to avoid bankruptcy, but store closures have still been necessary to ensure the financial health of the company. Other companies have not been quite so lucky.

Guardian Pharmacy filed for filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Pennsylvania amidst mounting financial difficulties.

But there are challenges Guardian Pharmacy faced that are probably common to all pharmacies and also likely contributed to Walgreen’s difficulties.

The nature of these changes aren’t always immediately obvious. The effectiveness of pharmacy locations have probably been affected, for example.

If someone has a prescription to fill or needs to pick up something from the drugstore, they use the handy locations close by to where they work, making a quick trip after work or maybe on their lunch break.

All of a sudden, those same pharmacy locations that were once super convenient, meeting the needs of customers, are essentially abandoned as it no longer makes sense for people to go there.

The height of the COVID-19 pandemic may be almost five years ago now, but one has to feel that businesses are still feeling its lingering effects. A COVID hangover could certainly be part of the problem being faced by operators like Walgreens.

Mr. Walgreen naturally had a gift for connecting with people and his customers.

Over 12,500 locations have been opened by the business throughout Europe and the United States. They are likewise supported by a labor force of in excess of 330,000 workers.

Tim Wentworth, the CEO of the company, implemented structural changes in 2023 for the benefit of the business. Plans to salvage roughly $1 billion in costs and close underperforming stores were among these strategies.  

The drug store battled with over-the-counter (OTC) drug uses and RX (script) filing costs.

The company’s stock reports prompted Wagner’s comment. The company’s shares rose steadily from 1995 until 2015, when they started and continued to fall.

This stock drop sees them faring far worse than rival CVS Health, whose stock only saw a 3% shedding of value. This latest stock drop for Walgreens sees them trading at a level more than 60% below where it started the year.

Additionally, the CEO of the business stated that plans were in place that would be to the company’s and customers’ advantage. He likewise added that it would involve “quarters” and not years before the primary changes are executed. 

Wentworth has said the organization will not be utilizing the primary care provider, VillageMD, as the majority primary care provider in its portfolio. Instead, Boots and Shields Pharmacies, based in the UK, will strengthen the company’s investments.

In the United Kingdom, over 560 stores have already been closed, and in the United States, 670 stores.

Customers might be affected by the large number of stores that are closing and, as a result, have to travel further to get to a branch.