Pharmacy chain closes 1,200 branches

Correction: An earlier version of this story misstated the portion of last quarter’s loss that was due to goodwill impairments.

Walgreens is closing about 1,200 stores in the United States as the pharmacy chain struggles with declining consumer spending.

The closures will occur over the next three years, starting with the closure of 500 stores in fiscal 2025, Walgreens said in an earnings report Tuesday. The company confirmed to USA TODAY in June plans to close unprofitable stores, but did not disclose how many locations would be affected.

The move is part of a multi-year cost-cutting program under CEO Tim Wentworth, who took over the job last year. In a statement, Wentworth reiterated the company’s commitment to focus on improving its core business of retail pharmacy.

“This turnaround will take time, but we are confident it will deliver significant financial and consumer benefits over the long term,” Wentworth said in the statement.

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Walgreens is closing 13% of stores in the US

While it’s not immediately clear which 1,200 stores Walgreens plans to close, the move would impact about 13% of the more than 8,700 stores open in the United States as of August 31 last year.

The announcement comes amid an improving – but still challenging – fiscal year 2024.

While Walgreens exceeded its goal of cutting costs by $1 billion in its most recent fiscal year, the chain posted a loss of $3 billion in its most recent quarter. Still, the chain’s sales rose more than 6% in its most recent fiscal year compared to the previous year, according to the company’s earnings report.

Sales in the retail pharmacy sector reached $29.5 billion in the fourth quarter, up 6.5% from the year-ago quarter.

Drugstore chains are struggling with declining sales

News of the impending closures comes as Walgreens and other drugstore chains struggle to keep up with competition from Amazon and as drug reimbursement rates decline through middlemen who fill prescriptions.

CVS has laid off thousands of corporate and other employees since 2023 while grappling with “ongoing disruptions, regulatory pressures and evolving customer needs,” a spokesperson previously told USA TODAY. Since filing for bankruptcy about a year ago, Rite Aid has closed hundreds of stores across the U.S. after years of struggling to keep up with its larger rivals.

But drugstores aren’t the only companies struggling with declining sales due to rising prices and declining consumer spending.

Just this week, hardware wholesaler True Value became the latest chain to file for bankruptcy since the COVID-19 pandemic, joining LL Flooring, Red Lobster, Bed Bath & Beyond and Big Lots, which have closed hundreds of stores since announcing bankruptcy Proceedings in July.

Many others, including Hooters, Walgreens, Sears, Kmart, JC Penney and even Disney Stores, are among those that have closed stores nationwide since 2020.

This story has been updated to correct a typo.

Contributors: Gabe Hauari, USA TODAY; Reuters

Eric Lagatta covers breaking and breaking news for USA TODAY. Reach him at [email protected]

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