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1,200 Walgreens stores to shut down within three years


Walgreens plans to close 1,200 stores over the next three years, with 500 of the closings expected to occur in the next 12 months. The pharmacy chain is downsizing due to flagging sales and changing consumer behavior, with estimates that a quarter of its U.S. stores are unprofitable. The closures were announced as part of the company’s fiscal fourth-quarter and full-year earnings, which surpassed Wall Street’s expectations. CEO Tim Wentworth indicated that the company is in the midst of a turnaround that will take time but is expected to yield significant financial and consumer benefits in the long term.

Both Walgreens and rival CVS are facing challenges in the current operating environment as consumers shift their habits. CVS announced plans to close about 900 stores, or about 10% of its U.S. locations, from 2022 to 2024. The pharmacy chains have been impacted by changes in the prescription drug market, including lower reimbursements from pharmacy benefit managers. This has led to a greater number of “pharmacy deserts” across the U.S. as companies in the retail pharmacy industry search for the best model to reach consumers. Rite Aid also recently emerged from bankruptcy as a privately owned company. The restructuring and closures in the pharmacy industry reflect a broader trend of companies adapting to new market conditions and consumer preferences.

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