Walgreens expects to close a 'significant' number of stores

As part of an effort to reset its struggling business, Walgreens plans to close a significant number of underperforming stores over the next few years.

During the Illinois-based pharmacy chain’s June 27 third quarter earnings call , executives said they expect to shutter up to 25% of the brand's 8,600 stores across the U.S. by 2027.

Walgreens has not yet specified which of its stores are slated for closure, but said the move is part of a multi-year strategy. In New Jersey, the company operates 190-plus locations.

Walgreens CEO Tim Wentworth told The Wall Street Journal the closures focus on locations that aren’t profitable, are too close to each other or struggling with theft. As of February, Walgreens has already closed 625 U.S. stores.

According to Wentworth, the company will continue to evaluate retail performance. He also said additional closures may come in the future. The “vast majority” of impacted employees will receive job offers elsewhere, he also said.

Walgreens also aims to invest in and deliver “an improved customer and patient experience across channels,” Wentworth said.

While Good Housekeeping published a list of underperforming Walgreens stores facing closure, the chain has not confirmed the locations.

The New Jersey store (Route 22 in Clinton) included already temporarily closed after a fire in February destroyed it.Walgreens opened a mobile pharmacy the following month where patients could pick up and drop off prescriptions, have consultations, receive immunizations or get testing.

Difficult environment

According to a spokesperson for Walgreens, " Approximately 25% of Walgreens stores are not contributing to our long-term strategy. We’re finalizing an optimization program that we expect will include closing a significant portion of these locations over the next three years. We are also taking a series of actions and making investments to enhance the customer and patient experience.

"While we cannot announce any specific closures right now, when we make the decision to close a store, we have processes in place to ease the transition for the communities affected," the spokesperson told NJBIZ.

Approximately 25% of Walgreens stores are not contributing to our long-term strategy.

Walgreens spokesperson

The move to shrink its vast retail footprint comes as more consumers go online to fill prescriptions, as well as buy items like candy and greeting cards. Other drugstore chains, such as CVS and Rite Aid , have also struggled in recent years.

“We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins,” Wentworth said.

“Informed by our strategic review, we are focused on improving our core business: retail pharmacy, which is central to the future of healthcare. We are addressing critical issues with urgency and working to unlock opportunities for growth. Many of these actions will take time, but I am confident that we have the right team and the right strategy to lead a business turnaround for the Walgreens that our customers and patients need,” he said.

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