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In a desperate attempt to fight off online competition and declining prescription payments, Walgreens has decided to do a little corporate spring cleaning—by closing approximately 1,200 of its locations. That’s right! They’re downsizing faster than an ambitious New Year’s resolution gone awry.
By 2027, Walgreens plans to close about one in seven of its stores, which could lead one to wonder if their long game is to become an exclusive club of pharmacies. Over the next year alone, 500 locations will shut down, and once those doors close, you can almost hear the sound of pharmacists weeping into their prescription pads.
Just a few months back, Walgreens was simply treading water, announcing only 300 closures as part of its master plan to “optimize” underperforming stores. Apparently, the optimization revelation hit them like a Netflix documentary: a quarter of their stores were “unprofitable”—and that didn’t even get an “Aha!” moment from the execs.
Curiously, while closing stores at a pace reminiscent of a game show exit round, Walgreens still managed to post stronger-than-expected sales for the last quarter. Yes, their revenue rose 6% year-on-year, but they also racked up a rather unimpressive $3 billion loss. Who needs to make a profit when you can write down a Chinese pharmaceutical chain and a home care provider called CareCitrix?
Clearly, the latest closure spree is not just a little housekeeping; it’s a resounding alarm bell echoing through the chilly corporate halls. Neil Saunders, the retail analyst, called it a “significant course correction.” Translation: things are not looking good, and they finally found the ‘Off’ switch for their optimism.
He added that Walgreens spent years acquiring other companies while completely forgetting about the basic grocery store principles of making money. It’s like they tried to turn their banquet hall into a nightclub without ever fixing the leaking ceiling—good luck dancing in the rain.
Shares of Walgreens did see a slight uptick of nearly 4% in premarket trading, but let’s not get too excited—they’re still limping along down nearly 70% for the year. It’s as if Walgreens’ stock is in a dramatic love affair with failure, one breakup at a time.
On top of this corporate carnival, rival drug chains like CVS and Rite Aid are busily sweeping up their own messes, grappling with shrinking profits due to pesky obstacles like low prescription reimbursements and the Amazon beast lurking in the shadows. Talk about a Walgreens waltz of doom!
And if you thought it couldn’t get worse, CVS recently announced they’re chopping about 2,900 jobs while on a quest for $2 billion in savings—because who doesn’t need a side of layoffs with their financial woes? It’s like corporate camping: one big bonfire of job securities in the name of ‘cost efficiency.’
The front-end of drugstores, where you used to snag a bag of chips and some aspirin, is now facing seismic pressure from competitors like Walmart and Dollar General. It seems everyone wants to sell snacks along with a side of pharmaceuticals—who knew grocery stores were really drug dealers in disguise?
In a last-ditch effort to win back shoppers, Walgreens slashed prices on over 1,000 items, essentially offering discounts like a small-town car dealership during a clearance event. “Come one, come all! Buy your painkillers and chips at rock-bottom prices!”
CEO Tim Wentworth remains optimistic, declaring that their turnaround plan will take time—because nothing screams success like a lengthy timeline to financial stability. Let’s sit back and watch this soap opera unfold, as Walgreens cuts dead wood in hopes of sprouting a money tree where its drugstore once stood.
According to Saunders, eliminating the “dead wood” may help Walgreens finally grow into the company it once dreamed of being, but hey, let’s be honest—it’s a huge neon sign blaring “we messed up big time” only to close with a sad little wave.
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