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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