Walgreens to close 1,200 Stores, Potentially Including Locations in NY, NJ, and CT

Walgreens is set to close approximately 1,200 stores over the next three years as the pharmacy chain seeks to recover from an estimated $3 billion quarterly loss.

Back in June, company executives indicated that they were finalizing a plan to turn around their U.S. operations, which would involve the closure of hundreds of stores.

Walgreens Financial Update

On Tuesday, Walgreens confirmed that around 500 stores will shut down during the current fiscal year in an effort to enhance cash flow. This initiative also incorporates the 300 stores previously marked for closure under earlier cost-reduction measures.

Walgreens CEO Tim Wentworth noted that fiscal 2025, which began last month, is a critical “rebasing year” for the company. “The turnaround will require time, but we are confident it will bring about significant financial and consumer advantages over the long term,” Wentworth said in a statement.

Walgreens has faced ongoing challenges, including tight prescription reimbursement rates, escalating operating costs, and growing competition from online giants such as Amazon, alongside traditional retailers like Walmart and Target.

Meanwhile, competitor CVS Health is wrapping up a three-year plan to close 900 stores, while Rite Aid recently emerged from bankruptcy after trimming its store count to roughly 1,300 locations.

Reasons Behind the Closures

Earlier this year, Walgreens reduced its shareholder dividend in an effort to free up cash for business expansion. In June, the company further lowered its forecast for fiscal 2024.

These actions are primarily due to underperformance in Walgreens’ U.S. retail and pharmacy divisions. The company has also incurred significant expenses related to opioid litigation settlements in previous quarters, along with challenges stemming from an equity investment in China.

Additionally, Walgreens has been exploring specialized services, such as the pet compounding pharmacy in New York, which offers customized medication solutions for pets. While this sector shows potential, it is unclear if store closures in the area will impact locations providing these services.

Which Stores Will Be Affected?

Walgreens has not specified which stores will be affected by the closures but has confirmed that all will be U.S. locations.

The company currently operates around 8,500 stores in the U.S., with several thousand more in international markets.

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