Walgreens announced this week that they will be closing 1,200 of their 8,700 locations nationwide over the course of the next three years, in an effort to save upwards of $1 billion in operating costs amid the Chicago-based pharmacy chains current financial woes.
The company has struggled in recent years due to high inflation driving down consumer spending, in addition to dealing with lowered reimbursement rates from insurance companies for dispensing prescription medications to patients.
The announced closures - which stores are being shuttered have not yet been revealed - currently number 1,200, but the drug store said that one in four of its stores are considered unprofitable, which could eventually result in as many as a full quarter of its stores - 2,000 - going under.
Walgreens' stock is down 65 percent so far in 2024, and is currently trading at 30-year lows. However, their stock increased 4 percent on Tuesday in trading in light of their most recent earnings report. Also, CEO Tim Wentworth implemented several cost-cutting measures when taking his job in 2023 in an effort to shave off $1 billion in costs, and said that the pharmacy chain is on the comeback trail.
“This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” Wentworth said in a statement.