Major drugstores testing smaller locations
Walgreens Boots Alliance on Tuesday said it plans to close 1,200 stores during the next three years as the embattled pharmacy chain attempts a turnaround in the face of low drug reimbursement rates and slower consumer spending.
Since taking the helm last year, CEO Tim Wentworth has announced multiple steps, including a $1 billion cost-cutting program.
Walgreens in May cut prices on 1,300 products across its U.S. stores, following other retailers in looking to appeal to inflation-weary customers.
“This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” CEO Tim Wentworth said in a statement.
The company in June said it would close a significant portion of its roughly 8,600 U.S. stores, but did not disclose the exact number.
Walgreens is not alone in struggling to grow its U.S. retail pharmacy business.
In October, Rite Aid said it planned to shutter 154 stores nationwide as part of its bankruptcy filing, which came amid slumping sales and mounting opioid-related lawsuits.
Pharmacies — both independent locations and retail chains — are closing around the country amid low reimbursement rates for pharmacy care as well as low dispensing fees for Medicaid enrollees.
Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.