Walgreens Closing 1,200 Stores Over Next Three Years
I wonder if locking up every product contributed to horrible sales.
Due to retail losses, Walgreens announced it will close 1,200 underperforming stores over the next three years.
I wonder if having to lock up everything contributed to horrible sales.
From The Associated Press:
The company said Tuesday that about 500 stores will close in the current fiscal year and should immediately support earnings and free cash flow. Walgreens didn’t say where the store closings would take place.
Company leaders said the initial wave of closings will take place mostly in the back half of its fiscal year, which started last month. Walgreens will prioritize poor-performing stores where the property is owned by the company, or where leases are expiring.
Walgreens operates about 8,500 stores in the United States and a few thousand overseas. All of the stores that will be closed are in the United States.
In June, CEO Tim Wentworth said “there is a ‘difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins.'”
Walgreens reported $37.55 billion in revenue in the fourth quarter, 6% higher than this time last year.
However, overall, the company has a net loss of $3 billion for the quarter.
REPORTER: “Walgreens announcing some tough news for many of their employees and people who like to shop there. They’re going to close over 1000 stores in the next three years. 500 will close their doors in the next one year. It’s in response to competition from online pharmacies like Amazon, then also rising labor costs and declining prescription drug payments. It comes just months after the pharmacy giant said it was going to close 300 locations. But this announcement of 1200 currently swamps that estimate.”
But, as I said above, I wonder if locking up products significantly affected low sales.
In August, Business Insider reported that Walgreens and CVS locked up products to deter shoplifting.
Drugstores are supposed to be easy shopping.
At one Duane Reade location in Brooklyn, New York, Business Insider saw an older adult ask why the toothpaste was locked up as an associate was unlocking aspirin for her. Duane Reade is owned by Walgreens.
[Global Data analyst Neil] Saunders also said it’s a natural response for retailers to try to protect their inventory from shoplifters, but preventing or delaying honest shoppers doesn’t exactly help a store’s financial performance either.
Spokespersons for Walgreens and CVS each told BI that anti-theft technologies were installed in response to store-level shoplifting data and intended to ensure that products were in stock for customers.
“Locking a product is a measure of last resort,” the CVS spokesperson said. Rite Aid did not immediately respond to a request for comment.
In 2022, a Rite Aid executive blamed high losses on shoplifting. The executive said the company was at a point of “‘literally putting everything‘ under lock and key.”
The different definitions of theft causes problems for companies to determine if shoplifting has a significant impact:
It’s partly a definition problem. “Organized retail crime,” “retail theft,” and similar terms don’t correspond with categories that local police departments use to categorize crimes, Hanna Love, a fellow at Brookings, told Business Insider.
That means many claims from retailers about those crimes rising relies on data that includes related but different offenses, such as shoplifting.
It’s unclear what makes organized retail crime “different than, say, other instances of shoplifting” from a data perspective, Love said. “We just don’t actually have the data to understand the problem.”
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Comments
This is what happens when stealing is not punished. Doesn’t help that the economy’s crap as well
I’m sure that’s a big part of it but they have over saturated the market in some areas. Here in SW burbs of Chicago I have 3 stores within a 3 mile radius. 2 of which are in the same town.
We have the opposite problem. We don’t have the shoplifting issue to the degree other places do (yet) so most things still aren’t locked up, but we don’t have many pharmacies around any more.
There used to be a Grocery store with a pharmacy right down the street. It closed ten years ago and the lot is condos now. There used to be a small local pharmacy about 2 miles away. It closed about 5 years ago…run out of business by the CVS and Rite Aid that opened on two of the three other corners of the intersection.
Then the Rite Aid just closed last year. So we’ve still got the CVS on that intersection about 2 miles away. We’ve also got a Walgreens on a different corner about 1.5 miles away. If it closes, CVS is all that’s left.
I guess that’s good for the CVS because they’ll be the only game in town…so to speak.
I’m not enough of a business major to interpret why Walgreens would be prioritizing outlets where they own the property themselves for closure.
the real money is IN the real estate
they can close the stores and rent/sell them to others if need be
or even re-open if they wanted
f the left!
Much of their real state is owned by investment partnerships, not them.
It could be because they’re already locked into leases for multiple years on all the others and they’d have to pay that regardless
Thanks, that makes plenty of sense.
It could be that the property underneath the stores is worth more than the store itself. Many of these large national companies are not retailers. They are real estate companies that have retail stores. It was that way for Sears and Kmart for many years.
I will always remember Ray Kroc (McDonald’s) ruefully admitting that his mistake was to think that his business was in selling food when it was actually managing real estate.
walgreens mgt said:
look,,,we played along for as long as we could with the
reparations aka smash and grabs
the admin promised we would be compensated but that fell through
as the admin blamed texas gov for sending migrants to cities up north causing a bad reaction by the normally solid blue based dem voters from the hoods who are now threatening to vote trump
so that promised money had to go to them
while we understand the current admins need to handle this problem
we must close stores in order to pay whats left of our employment base
Outside of shit holes, I think it is also the continued decline of the drug store business. Try to call a CVS or Walgreens pharmacist and get them on the phone. Last time I tried in my area I waited over 30 mins and got nothing. They are unreachable for a good portion of the day.
Most people don’t shop at one of these places unless they have Rx or at least OTC meds to get. And most people I know have switched away due to poor service, likely due to a snowball effect of cutbacks from competition failure. Online retailers and Mail order pharmacy are killing these places. Many insurances have lower copay if you go through mail order.
hey LI
compare these 2 stories:
jan 2023
The Pentagon on Tuesday shut down speculation it’s considering back pay for service members it discharged for refusing to get a COVID-19 vaccine, distancing itself from an already politically hazardous issue that has become even more prejudicial for the military with Republican control of Congress.
to this:
oct 2024:
Deputy Secretary of Defense Kathleen Hicks said troops “were given discharges that may have denied them access to veterans’ benefits like home loans, healthcare, GI Bill tuition assistance, and even some government jobs.”
Austin said Tuesday that with the hundreds of changes recently made in the proactive review, 96% of all service members who were kicked out of the military under “don’t ask, don’t tell” — and who served long enough to receive a merit-based characterization of that service — now have an honorable discharge.
More than 800 records of service members who were kicked out of the military under the “don’t ask, don’t tell” policy were recently upgraded to receive honorable discharges, Defense Secretary Lloyd Austin said Tuesday
Vagrants are stealing them blind.
Society cannot be peacefully maintained as things stand, it is time to revitalize WPA camps, let them clear brush from right of ways, pick up trash, or move earth for their provisions, banishment to a blue state if they refuse.
Great idea!
All the closings will be US stores. Hmmm…
They aren’t locking up things in my local stores, I wonder why…. hhhmmm…
Oh right, crime is not out of control here.
Same in my nearby Walgreens in central Florida.
Same in my rural south central Alabama location.
Crime is down, the economy is doing great, guys. Just ask Walgreens.
I would like to see a map of where the 1,200 stores which are being closed are located.
The closings are being done strictly by ZIP code, NOT by demographics.
(Thank you, Boston School Board. Two can play any game you name.)
Also Amazon and insurance company’s are offering prescriptions that is taking Walgreens customers away while things steal what is left in the stores.
Thugs not things
Same same
Note that Walmart Pharnacy in TX has for years had good mail order prices on some drugs. Also GoodRx.com has good coupons that can be used at pharmacies within supermarkets.
The funny thing in both the Walgreens and CVS closures is that no one is talking about the massive building spree that both chains had over the past 20 years or so. For a while there, it seemed like there were as many drug stores as mattress stores. In any event, cue up the bleating as the chain closes mostly “urban” stores and complaints about “pharmacy deserts” start to mount.
Yeah. I want to see urban hellholes complain about being “pharmacy deserts.” Except, of course, for every street corner in the neighborhood. Why screw around with fake Sudafed when you can go straight to meth.
My CVS in a good neighborhood closed, they said it was because the “fromt” store items didn’t sell to keep out
Their shelf items were ridiculously expensive, toothpaste, etc
But this is terrible news
Imagine Amazon having to be your pharmacy, you literally are nuts to buy food or medicine from them
It’s always expired or nearly
No no no
Everything is overpriced at CVS, but …if you buy 2, you can get a reasonable price cause they’ll give you the 2nd one at “50% off”. I hate that shit. And there’s never a cashier at the one I go to anymore.
Walgreens and CVS have a]various problems in common with other retailers, including theft, high labor costs, and excessive regulations, but their pricing schemes are really killing them.
Customers have come to expect that unless a given item happens to be on sale, they will have to pay a price that is significantly higher than the price they would find in other outlets, especially Walmart. It is little wonder that they are struggling.
Will this stop the callers who say they represent Walgreens stop pestering me?