By Clark 
A burgeoning number of grocery businesses, including Walmart and 99 Cents Only Stores, have been grappling with substantial store closures in 2024. Walgreens has become the most recent retailer to be included on that list as it faces diminishing profits and extensive layoffs.
During a call with investors on June 27, Walgreens CEO Tim Wentworth declared that the business intends to close a substantial number of underperforming stores during the next three years.
The executive stated that Walgreens persists in facing challenges in the current adverse operating climate, attributing this to ongoing pressures on consumers in the United States and a decline in pharmacy margins.
Walgreens presently maintains over 8,700 sites in the United States and Puerto Rico, with around 25% classified as underperforming. The firm is in the process of determining the precise number of shops to be closed and will issue an update upon reaching a conclusion.
Wentworth cautioned that they may close further underperforming locations in the future if performance does not enhance.
Although closing the business is a difficult decision, we will strive to mitigate customer disruptions. Significantly, as previously executed, we plan to reassign the majority of the personnel from the stores we close, he stated.
The announcement on the intended closures follows a challenging year for the pharmacy and convenience store operator. Walgreens closed 450 shops in the United States and the United Kingdom last summer following a 60% decline in net earnings in the third quarter of 2023.
At that time, the corporation attributed the declines to a reduction in consumer expenditure and diminished demand for COVID-19 services such as immunizations.
Walgreens implemented a restructure, resulting in the termination of approximately 500 employees to reduce expenses, which constitutes around 10% of its corporate and U.S. support office personnel.
Although sales have risen during 2023 and continue to ascend in 2024, some sectors of Walgreens’ company have stagnated since last summer.
The company has reported diminishing earnings, terminated hundreds of new employees to conserve cash, liquidated two of its distribution sites, and shut down 160 VillageMD clinics. VillageMD is a primary care organization in which Walgreens has invested since 2020.
Walgreens’ recent intention to close further shops is an initiative to realign the business. In conjunction with this move, Walgreens has reduced prices, optimized its product selection, and intends to diminish its ownership in VillageMD, ceasing to be the primary stakeholder.
Upon request for further information and commentary regarding the anticipated closures, Walgreens provided the subsequent statement to Eat This, Not That!:
We are restructuring our retail presence for the future. Approximately 25% of Walgreens locations are not aligned with our long-term plan. We are concluding an optimization program that we anticipate will involve the closure of a substantial number of these locations over the next three years.
We are implementing a variety of measures and investing to improve the customer and patient experience.