Walgreen Shut Downs 200 Stores In The United States
The second-largest pharmacy chain in the United States announced that it’s going to close 200 stores in the United States. Walgreens has almost 10,00 stores in the United States and this decision will reduce its pharma footprint by 3%. The company anticipates that it will have a minimal disruption on its business.
The company has not enlisted the location of the stores yet.
Last year it announced that it will shut down about 200 UK stores but the plan has not yet come into the effect. Parent company Walgreen Boot Alliance says that the decision will save up to $1.5 Billion in annual expenses by 2022. While the employees who have lost their position at the stores will be reallocated to nearby locations.
The company is calling its bold move as “transformational cost management program”. While it is expecting that this program will result in a jump of revenue from $1.9 Billion to $2.4 Billion earnings. While the company has announced the shutdown, industry analysts are afraid that the digital market world is overtaking the offline mode which can impact the sales.
Following the rising of the e-commerce market, people are buying the prescription online avoiding the scorching heat or the shivering winter. The Alliance announcement is witnessed after four years where it closed the same number of stores. Its parent company had bought 1,932 Rite Aid locations in 2018, has since closed 631 of those stores and plans to shut 119 more.
“As previously announced, we are undertaking a transformational cost management program to accelerate the ongoing transformation of our business, enable investments in key areas and to become a more efficient enterprise,” Caruso said. “As part of this effort, we plan to close approximately 200 stores in the U.S,” the company spokesperson said.
Walgreen’s competitor CVS is also planning to close 49 under-performing stores in the United States. The move costs the company about $136 Million as a “store rationalization charge”. However, it only represents 1% out of its 9,600 CVS Pharma stores.