*Walgreens is set to close around 1,200 stores as it, along with other drugstore chains, faces challenges in staying relevant to U.S. shoppers who now prefer online retailers or cheaper competitors.
Traditional drugstores have been hit by shrinking prescription profits, rising costs, theft, and the fading impact of their COVID-19 vaccine role, according to The Associated Press. Walgreens’ move follows CVS Health’s closure of 900 stores over three years and Rite Aid’s bankruptcy, leaving it with only about 1,300 locations.
“They’ve really got to rethink how they do business and, most importantly, what they mean and what value they bring to the customer,” said Neil Saunders, managing director of consulting and data analysis firm GlobalData.
“Consumers are being more wary about where their dollars are being spent and Walgreens’ retail side of the biz is struggling more compared to last year,” Morningstar analyst Keonhee Kim told The New York Post.
During the pandemic, retail theft exploded in the chain, and it continues to be problematic. “It’s not a convenient shopping experience with everything locked up,” Kim said.
Walgreens Boots Alliance Inc., which runs about 8,500 stores in the U.S., said it will start closing about 500 stores in its current fiscal year, which started last month. The company has not specified the locations of the store closures but will focus on shutting down underperforming stores.
CEO Tim Wentworth said around 6,000 of Walgreens’ stores remain profitable, offering a “solid base” for the company to grow from.
“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,” said Wentworth.
READ MORE FROM EURWEB.COM: Walgreens Announces Closure of 450 Stores Across U.S. and U.K.
