Walgreens is a large American company that operates a chain of retail pharmacies. It is one of the larger pharmacy chains in the United States, with thousands of locations nationwide. Walgreens offers a variety of services, including prescription filling, health and wellness products, photo services, and basic groceries. The company also provides healthcare services such as vaccinations and health screenings.

Walgreens is part of the Walgreens Boots Alliance, which was formed through the merger of Walgreens and Alliance Boots in 2014. This global company includes retail and wholesale pharmacy operations across multiple countries.

On June 27, 2024 the retail pharmacy chain announced quarterly earnings that did not meet Wall Street expectations. The stock price was down 25% in the afternoon.

It looks like the company will have to close several stores to compete in this “challenging” marketplace.

The CEO Tim Wentworth spoke to CNBC and said Walgreen’s Management predicts weaker spending from the consumer this year.

“We assumed…in the second half that the consumer would get somewhat stronger” but “that is not the case,” Wentworth said.

“The consumer is absolutely stunned by the absolute prices of things, and the fact that some of them may not be inflating doesn’t actually change their resistance to the current pricing. So we’ve had to get really keen, particularly in discretionary things.”

Walgreens slashed prices like Target did last month. The prices were reduced on about 1,300 goods. The goal being to help customers who are under tighter budget constraints.

The CEO did not give an exact number of stores they plan to close. However, he said “75% of our stores drive 100% of our profitability today. What that means is the others we take a hard look at, we are going to finalize a number that we will close.”

The implication is Walgreen’s could be closing over 2,000 stores because there are about 8,600 stores, and 25% is 2,150 stores.

Walgreens has experienced difficulties for years.

Currently, it is roughly one-third of the size of CVS. It’s main competition, also facing marketplace pressure.

 

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