Walgreens to Close 'Significant' Number of US Stores

Walgreens plans to close a large share of its U.S. stores over the next three years, CEO Tim Wentworth said on a conference call with industry analysts on Thursday. Wentworth described a quarter of the company's 8,500 stores as "underperforming," saying the pharmacy chain would close a "significant portion" of those locations. The exact number of closures is still being finalized, Wentworth said. Walgreens will make changes at the remainder of the struggling stores in an effort to revitalize them, Wentworth said.

Total Retail's Take: A number of factors have contributed to Walgreens' current challenges, according to Wentworth. They include price-conscious consumers who are showing fatigue from an extended period of high inflation, pharmacy-specific challenges such as costly regulations and insufficient reimbursements from third-party pharmacy benefit managers (PBMs), and narrowed profit margins from lower product pricing (necessitated by budget-conscious consumers). While closing unproductive stores is part of Wentworth's plan to bring the company back to health, he's not giving up on physical retail. "I'm at Walgreens because I believe in the future of retail pharmacy," he said. "Human-to-human interaction is an imperative in healthcare and the core foundation of our business."