Walgreens Announces Closure of 'Significant' Number of Stores

0:00

/1861

1×

Facts

• Tim Wentworth, chief executive officer of the Walgreens pharmacy chain, said on Thursday that the company will be closing a 'significant' number of its roughly 8.6K retail outlets, adding that their business model is 'not sustainable.'¹
• The company had already closed 625 stores as of February as part of a cost-cutting plan. Wentworth said that economic pressures on customers, especially low-income ones, has made shoppers 'increasingly selective and price-sensitive.'²
• Sales at outlets open for at least a year dropped by 2.3% compared to last year. The company also revised its earnings estimate for 2024 to $2.80-$2.95 a share, down from $3.20-$3.35 a share.³
• Walgreens stock tumbled nearly 25% as the news was released. Even after the chain cut prices on 1.3K products last month, Wentworth said consumers are 'absolutely stunned' at retail prices, as it also reported a drop in prescription revenues.⁴
• Wentworth suggested that upwards of 25% of stores could be closed without giving specifics and that affected employees would likely be reassigned to other stores. The decline in trading marks the company's worst loss since 1972.⁵
• Other pharmacy chains have struggled in both the prescription drug and retail businesses, facing pressure from lower prescription reimbursement rates and competition from outlets such as Amazon, Target, and dollar stores.¹

Sources: ¹CNN, ²New York Times, ³FOX News, ⁴NBC and ⁵Forbes.

Narratives

• Republican narrative, as provided by The Hill. The unintended consequences of the Biden administration's inflationary agenda are that employees and businesses will suffer, as consumers can no longer keep up with skyrocketing prices. What's worse, an epidemic of shoplifting has cost the country $100B, as progressive-leaning district attorneys let thieves walk away scot-free. Walgreens itself has had to close outlets due to shoplifting, as Democrats put the squeeze on corporate America.
• Democratic narrative, as provided by CNN. Inflation was a convenient excuse for corporations to gouge struggling consumers. It is clear that the greed of big business isn't sustainable, as Walgreens was forced to cut prices to lure cash-strapped Americans back into their stores. The suspicious timing of that has confirmed in the minds of many that widespread profiteering has become the norm, and consumers are thusly voting with their wallets. The hit Walgreens is taking was a long time coming.

Predictions