Walgreens plans to close a significant number of its U.S. stores over the next three years, targeting a quarter of its 8,500 locations deemed “underperforming,” Chief Executive Tim Wentworth said Thursday. The exact number of closures has yet to be finalized, but the company will also attempt to revitalize remaining struggling stores, with the possibility of further closures if improvements are not seen.
This decision follows a comprehensive review initiated nearly seven months ago in response to declining consumer spending and adverse changes in the pharmacy industry. The company reported $28.5 billion in revenue for the three months ending in May, slightly up from the previous year but still below expectations. Wentworth highlighted increased price sensitivity among customers and regulatory challenges in the pharmacy sector as significant factors impacting performance.
Walgreens aims to minimize layoffs by redeploying most employees from closed stores. The company is also actively negotiating with third-party pharmacy benefit managers to address reimbursement issues and improve its business model, which Wentworth described as currently unsustainable.
