Walgreens to Shut Down 1,200 Stores as Competition Surges and Prescription Profits Decline
Walgreens is preparing for one of the largest downsizing moves in its history, announcing that about 1,200 of its stores will close as the company struggles with falling prescription reimbursements and growing pressure from online retailers. By 2027, roughly 15% of its current locations will be gone, with nearly 500 closures planned within the next year, the company revealed Tuesday.
This marks a dramatic expansion of the strategy CEO Tim Wentworth outlined in June, when Walgreens said it would shutter 300 struggling stores as part of a long-term effort to reshape the business.
At that time, executives warned that approximately a quarter of all locations were failing to turn a profit—an early sign of the broader overhaul now underway.
Even though Walgreens posted better-than-expected revenue last quarter—up 6% compared to the previous year—the company still reported a staggering $3 billion loss, largely due to write-downs tied to its investment in a Chinese pharmacy chain and the home care provider CareCitrix.
Despite the grim news, shares of Walgreens jumped almost 4% in premarket trading. Still, the stock remains down nearly 70% for the year, reflecting the severity of the company’s challenges.
Traditional drugstore chains across the country, including CVS and the bankrupt Rite Aid, have all been hit by shrinking profits on prescription medications due to reduced reimbursement rates and fierce competition from Amazon’s expanding pharmacy services. CVS recently cut nearly 3,000 jobs as part of a broader plan to slash $2 billion in expenses.
On top of that, retailers like Target, Walmart, and Dollar General continue to siphon away customers in everyday categories such as snacks, beauty products, and cleaning supplies. In response, Walgreens rolled out price reductions on more than 1,000 items earlier this year in an attempt to win back cost-conscious shoppers.
Conclusion:
Walgreens’ plan to close 1,200 stores underscores the massive shifts reshaping the pharmacy industry. With online competitors expanding rapidly and prescription profits shrinking, traditional chains face mounting pressure to streamline operations and rethink their business models. Strategic closures, leaner cost structures, and aggressive pricing may be the only way forward as the retail landscape continues to evolve.