In May, over 100 pharmacies closed across the U.S., with 137 shutdowns reported by ScrapeHero.com compared to just 81 new openings. Walgreens led the closures with 71 locations shut down, especially in California, Georgia, and the East Coast. CVS closed 23 pharmacies, while Rite Aid shuttered nine.
These closures highlight the challenges facing traditional pharmacy chains due to changing consumer habits, rising theft, and declining foot traffic. In contrast, discount chains like Dollar General and Dollar Tree are expanding, with 51 and 16 new stores opened, respectively.
Walgreens’ struggles reflect broader issues in the sector, compounded by overexpansion, inflation, and legal costs. Since its 2014 merger with Alliance Boots, the company has been burdened by debt and has struggled to streamline operations. In 2019, Walgreens announced plans to close hundreds of stores to cut costs.
Additionally, Walgreens has incurred billions in settlements related to the opioid crisis, including over $5 billion in lawsuits in 2022. To diversify, the company is focusing on healthcare services, partnering with VillageMD and acquiring primary care providers.
However, Walgreens continues to face poor financial performance, reporting a net loss of $3.1 billion in fiscal year 2023, a significant drop from a net income of $4.3 billion the previous year. As competitors like Amazon and Walmart increase their presence in prescription services, Walgreens is attempting to stabilize by reducing its footprint and emphasizing healthcare delivery.
