The pharmacy chain Walgreens is set to shutter 1,200 of its stores in the US as one-fourth of its locations are not turning a profit.
Roughly 500 locations will close by the end of August 2025, and the other 700 will shut their doors within three years, the struggling chain’s owner, Walgreens Boots Alliance, announced on Tuesday.
The Chicago-based drugstore chain currently has about 8,700 stores across the country. By 2027, one in seven of them will be out of business.
Walgreens has not disclosed which stores will close.
The decision is part of its effort to cut $1billion in costs.
‘This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,’ stated Tim Wentworth, who assumed the role of Walgreens CEO last year.
Walgreens shares hiked up over 13% to $10.20 after markets opened on Tuesday.
Wentworth told analysts that most of its stores, or around 6,000, are profitable and that he expects them to boost the company.
‘This solid base supports our conviction in a retail pharmacy led model that is relevant to our consumers,’ he said.
‘And we intend to invest in these stores over the next several years.’
But retail analyst Neil Saunders said the closures are ’emblematic of a company that is in trouble and is trying to course correct’.
Getting rid of ‘dead wood will help the company strengthen its financials over time, but it is a huge admission of failure’, Saunders told CNN.
Walgreens is the second-largest pharmacy chain in the US after CVS Health.
The closing of 1,200 Walgreens locations has raised concerns that some communities will become pharmacy deserts.
Walgreens is not the only chain that has been hit by customers cutting back on spending amid inflation.
The discount department stores chain Walmart has closed 11 stores across six states in 2024, after shuttering all 51 of its health centers earlier this year.
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