Walgreens Boots Alliance plans to close 1,200 stores over the next three years and 500 next year in the face of low drug reimbursement rates and weak consumer spending.
The Deerfield, Illinois-based company said Tuesday it would close about 14% of its U.S. locations and redeploy most of the affected employees. “We’re in a turnaround,” Tim Wentworth, the drugstore chain’s chief executive officer, said on an earnings call.
“The closure of so many stores is emblematic of a company in distress and trying to get back on track,” said Neil Saunders, managing director at GlobalData. The analyst added, “Walgreens spent years building its business through acquisitions, but completely ignored the fundamentals of stores and retail operations.”
Walgreens’ fourth-quarter profit also beat lower expectations, and its 2025 profit forecast was in line with analysts’ expectations. Wall Street cheered the announcement, and the company’s stock rose $1.42, or nearly 16%, to close at $10.42 per share, down 60% since the beginning of the year.
Wentworth has announced several measures since taking office last year, including a $1 billion cost-cutting program.
walgreens in may Price reductions on 1,300 items It is following other retailers and rolling it out across all U.S. stores to appeal to inflation-weary customers.
company said in june The company will close a significant portion of its roughly 8,600 U.S. stores, but declined to say exactly how many.
Wentworth said he expects Walgreens to take over nearly all prescription filling operations from the stores scheduled to close.
Walgreens isn’t the only company struggling to grow its U.S. retail pharmacy business.
October, Rite Aid I said I was planning As part of this, 154 stores nationwide will be closed. bankruptcy filingappeared in the midst of poor sales and Mt. Opioid-related litigation. CVS Health said earlier this month: 2,900 jobs cut As part of an effort to reduce costs by $2 billion.
A CVS spokesperson told CBS MoneyWatch in an email that the layoffs represent about 1% of the healthcare company’s workforce.
Pharmacies are available in both independent stores and retail chains. Closed across the country Reimbursement rates for pharmacy care are low and dispensing fees for Medicaid enrollees are also low.
Walgreens, like its competitors, is feeling the impact as millions of Americans have lost health insurance since the end of pandemic policies that guaranteed Medicaid coverage during the health emergency. After Medicaid enrollment surged during the pandemic, millions of people were removed from the health care program for low-income Americans, Rick Gates, the company’s SVP and chief pharmacy officer, said on a conference call. “A situation in which they had no choice.” Expand your coverage as soon as possible. ”