Walgreens has announced that it will close five stores in Southern California, with locations in Whittier, downtown Los Angeles, Orange, Placentia, and Stanton set to shutter by late March, the closures are linked to what the company describes as "increased regulatory and reimbursement pressures." According to KTLA, these pressures have made it difficult for Walgreens to manage expenses for rent, staffing, and supplies.
Marty Maloney, Walgreens’ director of media relations, emphasized the tough choice behind these decisions, "It is never an easy decision to close a store," he said, and noting, "We know that our stores are important to the communities that we serve, and therefore do everything possible to improve the store performance," as told to the Los Angeles Daily News. Layoffs as a result of the closures could impact up to 93 employees however, the company has mentioned that affected employees will be offered positions at other locations.
The closures are part of a larger "footprint optimization program" by Walgreens which aims to close about 1,200 stores over a three-year span, about 500 of those closures anticipated this fiscal year, according to a Walgreens statement reported by FOX Business. CEO Tim Wentworth discussed the plan's role in the company's overall strategy during an earnings call, claiming progress on key aspects of the stabilization of the U.S. retail pharmacy business.
Meanwhile, the wider pharmaceutical retail industry faces challenges, with Walgreens' stock price having plunged by 82% over the last five years, the company grappling with the ramifications of COVID-19, an opioid litigation settlement, and shifts in consumer behavior, as reported by New York Post. Other chains like Rite Aid filed for Chapter 11 bankruptcy in late 2023, announcing over 100 store closures across the nation, and CVS has also unveiled plans to close several stores to refocus on alternative business strategies.
