Illinois Based Chains Announces 1,200 Store Closures

Walgreens to Close 1,200 Stores as Competition and Declining Sales Hit Illinois Giant

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Walgreens, the Illinois-based pharmacy giant, announced plans to close approximately 1,200 stores over the next three years, with around 500 closures occurring in the current fiscal year. This decision comes after the company reported a 3.5% drop in fourth-quarter retail sales year over year and a 4.6% fall in full-year retail sales.

According to Walgreens, the closures are expected to positively impact cash flow, even after accounting for closure costs. The company noted that the financial benefits would increase as store leases expire. Walgreens also plans to sell owned stores, generating significant working capital and helping to offset closure costs. The company may sublease locations or negotiate lease buyouts to reduce financial strain further.

The move comes as Walgreens, along with other drugstore chains, faces increasing competition from e-commerce giants like Amazon and struggles with declining prescription reimbursement rates. CVS, another major player in the industry, has also laid off thousands of employees since 2023, citing “continued disruption” and evolving customer needs. Rite Aid, after filing for bankruptcy, has closed hundreds of stores as it struggles to stay competitive.

Neil Saunders, Managing Director at GlobalData, commented, "The closure of so year over year and a 4.6% fall in full-year retail salesmany stores is emblematic of a company that is in trouble and is trying to course correct."

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