Walgreens will be closing a substantial number of its more than 8,600 U.S. stores over the next three years.
The pharmacy chain has not announced exactly how many it will shutter, or exactly when, but on a call with analysts Thursday, CEO Tim Wentworth said that around 25% of the company’s struggling stores will see changes. Those changes will include “the closure of a significant portion of these underperforming stores” over the next three years. (Walgreens did not immediately respond to Fast Company‘s request for clarification.)
“We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins,” Wentworth said in a press release. “Our results and outlook reflect these headwinds.”
Shares of Walgreens took their steepest dive in decades after the company announced its third-quarter earnings, which were lower than previously anticipated.
Walgreens maintains that it’s been working hard to combat inflation, which has seemed like an uphill battle. In May, the brand slashed prices on more than 1,000 items, as many other chain retailers have been doing. But just like other pharmacies, it has also been plagued by walkouts over pharmacists’ concerns of demanding work schedules, reduced training, and burnout. Some overworked pharmacists have cited safety concerns for the immense number of patients whose prescriptions they are filling each day. Walgreens had previously already shut some pharmacies amid the concerns.
Now, the news of impending closures could create even bigger problems. Residents in some neighborhoods have protested Walgreens’ previous closures, as they argue that Black and brown neighborhoods are being impacted the most. To that point, U.S. Representative Ayanna Pressley and U.S. Senators Ed Markey and Elizabeth Warren expressed their concerns in a letter to Wentworth earlier this year, writing, “These closures are occurring within the larger legacy of historic racial and economic discrimination that has created significant pharmacy and food deserts and lack of access to transportation in these neighborhoods.”
Some researchers fear that so-called pharmacy deserts can create desperate situations for residents, especially those who have to rely on walking to their local pharmacy for prescriptions, flu shots, infant formula, OTC medications, and more.
Meanwhile, Wentworth told the Wall Street Journal on Thursday that most staffers affected by the impending store closures will be able to be reassigned, in hopes that the move doesn’t lead to “a meaningful loss of jobs” in the U.S.