Illinois Retail Giant Announces Major Downsizing: 1,200 Stores Set to Close

A popular national chain just made headlines with its recent announcement that it will close 1,200 stores over the next three years, with 500 closures slated for 2025 alone.

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This decision comes due to a challenging retail landscape, as the pharmacy giant aims to stabilize its operations and improve profitability, according to a report from Supermarket News.

Walgreens Announces Significant Store Closures

During an earnings call on Tuesday (10/15), Walgreens CEO Tim Wentworth emphasized the need for the company to focus on “stabilizing” its retail pharmacy operations.

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He explained that controlling operating costs and enhancing cash flow are critical for the future. “Fiscal 2025 will be an important rebasing year as we advance our strategy to drive value creation,” Wentworth stated, underscoring the belief that these changes will yield long-term benefits for both consumers and the company.

Underperforming Stores to Be Shuttered

While Walgreens has not disclosed the specific locations of the stores set for closure, it operates approximately 8,700 stores across the U.S. and several thousand internationally.

Wentworth noted that about 6,000 of these locations are profitable, indicating that the underperforming stores will need to be cut to align with the company’s revamped strategy.

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He also mentioned that the company would seek to find new employment opportunities for affected workers within its remaining stores.

Adapting to Market Pressures

This strategic shift follows a series of cutbacks at Walgreens, which has faced mounting challenges in the retail pharmacy sector.

The company previously indicated its intent to close a “significant number” of underperforming locations due to pressures on consumer spending and a challenging pharmacy pricing environment.

Walgreens has reduced its stake in VillageMD and cut hundreds of corporate positions in recent months, according to the story from Supermarket News.

Embracing Private-Label Brands

In a bid to enhance profitability, Walgreens is also re-evaluating its merchandising strategy, focusing on expanding private-label offerings, particularly in health and wellness categories.

With inflation impacting consumer spending, many retailers are investing in their own brands, and Walgreens aims to capitalize on this trend.