Walgreens is accelerating its plan to close underperforming stores as part of a broader effort to streamline operations and address declining profits. The company, which operates around 8,500 locations in the United States, announced in October 2024 its intent to shutter approximately 1,200 stores over a three-year period.
Targeting Underperforming Locations
The decision to close these stores comes as Walgreens faces challenges such as low drug reimbursement rates and sluggish retail sales. Timothy Wentworth, CEO of Walgreens Boots Alliance Inc., stated in June 2024 that about 25% of the company’s stores were not contributing to its long-term strategy. These closures, he noted, are intended to strengthen the overall performance of the remaining locations.
In its fiscal year 2025, which ends in August 2025, Walgreens plans to close around 500 stores, with 70 closures already completed by the end of its first quarter on November 30, 2024. The company anticipates significantly ramping up closures in the coming months, with another 450 stores expected to close by the end of the fiscal year.
Cost-Cutting Measures and Investor Confidence
These closures are part of Walgreens’ broader $1 billion cost-cutting initiative. The company has already closed around 2,000 locations over the past decade, reflecting a steady effort to optimize its retail footprint. Despite the disruptions, Walgreens’ financial progress has inspired investor confidence; shares of the company have risen 35% since the release of its first-quarter financials on January 10, 2025.
Wentworth emphasized that the stores remaining open are performing “materially stronger” than those being shuttered, though he acknowledged room for further improvement.
Closures Across the United States
Walgreens has not released a comprehensive list of store closures but reports from local outlets highlight specific locations set to close in February 2025:
- Tallahassee, Florida: Closing Feb. 25 (source: Tallahassee Democrat).
- Quincy, Massachusetts: Closing Feb. 27 (source: The Patriot Ledger).
- Augusta, Georgia: Closing Feb. 20 (source: WRDW and WAGT News).
- Chicago, Illinois: Five locations closing Feb. 17–27 (source: WGN).
- Oakland, California: Two stores closing Feb. 24 and Feb. 27 (source: KTVU).
- Rockford, Illinois: One store closing Feb. 19 (source: WTVO).
- San Francisco, California: A dozen locations closing Feb. 24–27 (source: The San Francisco Standard).
Long-Term Outlook
Walgreens’ strategy reflects a significant shift in its retail operations, aiming to adapt to a challenging market environment while enhancing the profitability of its core locations. The company’s efforts to streamline operations and focus on stronger-performing stores signal a long-term commitment to maintaining stability amid industry pressures.
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