CVS, Rite Aid also closing stores.
Over the next couple of years, pharmacy chain Walgreens will close another 2,150 or so stores, CEO Tim Wentworth told the Wall Street Journal on June 27.
Wentworth says there are a number of reasons for the closures, not the least of which is America’s failing economy and the resultant profit losses Walgreens is seeing. There are also too many Walgreens stores located too closely together coupled with a rampant theft problem at many locations.
The next generation of Americans is also much more avert to taking pharmaceutical drugs than older generations which means declining demand for prescriptions. Many people who still do take medications are also filling their prescriptions online rather than visiting Walgreens stores in person.
“The current pharmacy model is not sustainable,” Wentworth told the Journal.
(Related: Back in 2022, U.S. District Judge Charles Breyer ruled that Walgreens “substantially contributed” to America’s opioid crisis.)
CVS, Rite Aid also closing stores
The entire pharmacy sector is struggling to survive for many of the same reasons which explains why competitor chains CVS and Rite Aid are similarly shutting down stores and tightening the financial noose.
Further, many prescription drugs are no longer covered through insurance at the same reimbursement rates they once were which means many Americans who take drugs are having to cut back or switch to something else for their health.
Another major change in the digital age is the massive rise in e-commerce which only accelerated during the Wuhan coronavirus (COVID-19) “pandemic.” People buy candy, cards and other convenience items online now rather than at pharmacies where these items tend to be wildly overpriced.
All of this and more points to the eventual disappearance of in-store pharmacies in the coming years.
“Our customers have become increasingly selective and price sensitive in their purchases,” Wentworth told the Associated Press (AP).
Though Wentworth did not reveal the exact number of stores his company is planning to close, he did use the word “significant” to describe it while warning that there could be even more store closures than planned if the economy and consumer purchasing habits continue on their current trajectory.
About 75 percent of Walgreens stores account for 100 percent of its operating income. This means that about one in four Walgreens stores is unprofitable and dragging the company down financially.
After Walgreens shuts down 25 percent of its stores, Wentworth says the remaining locations could see profit boosts that at least somewhat make up for the loss. As for the company’s employees, his hope is that the store closures will not result in “a meaningful loss of jobs.”
“Approximately 25 percent of Walgreens stores are not contributing to our long-term strategy,” a company representative told Good Housekeeping.
“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.”
In the comments, readers pointed out that prices at Walgreens tend to be two or even three times the cost that other stores are charging.
“The few times I go in the store to pick up a prescription I’m usually the only one in place,” one added about how dead the stores usually are. “And still the pharmacy people are too rushed to help me and are super unfriendly.”
There are many excuses out there as to why Walgreens and many other businesses are failing in America, but the root cause is our nation’s corrupt financial system and the crumbling house of cards upon which it was built. Learn more at Collapse.news.
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