Major drugstore chain closing hundreds of struggling stores

Back in the day, if you asked a business owner what one of the biggest constants was in his or her industry, you'd probably get a variety of answers. 

They might tell you about the importance of location to attract foot traffic. 

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Perhaps they'd say it's e-commerce, and the push to get inventory online. 

Maybe they'd highlight the importance of sustainability to please an increasingly socially-conscious consumer. 

Or, they might tell you that it's just about pleasing the customer and giving them a pleasant shopping experience.

To be sure, most of these are still pretty big themes in the retail space.

But the biggest constant nowadays isn't any of the aforementioned themes. 

It's change.

Nearly every single retailer will now unanimously tell you that change is pretty much the only predicable thing in the industry. 

Consumer tastes, technology changes, and even how we search for products and services have changed. Many folks are now leveraging artificial intelligence platforms rather than traditional search engines to shop or problem-solve. 

And the only way to keep up with such a rapidly evolving landscape is to get with the times.

Change is a fickle thing

But getting with the times is easier said than done. 

Many retailers learned the hard way when Covid swept the nation in early 2020. 

Most consumers started doing the bulk of their shopping online, so stores had to rapidly scale up their e-commerce operations to serve them better -- or risk obsolescence. 

More closings:

• Iconic ice cream chain unexpectedly closing locations
• Struggling auto parts chain closing down all stores but one
• Another discount retailer closing over 1,000 stores
• Iconic retail chain closing nearly 500 stores

Walmart, for instance, rolled out Walmart+, its answer to Amazon Prime. Target has since launched Target Circle 360. 

And plenty of retailers have scaled back brick and mortar operations, since they're expensive to run and (broadly) offer a less targeted approach to acquiring customers. 

Some retailers have it tough

But not all retailers can get away with cleanly closing up shop and transitioning online.

Some chains actually need to maintain a physical footprint. 

Drugstores are one such example. They fulfill prescriptions and many perform healthcare services, which many Americans rely on procuring in person. 

They're also often positioned in high foot traffic areas, like urban city centers. 

But this can act as a double-edged sword. On the one hand, being on a busy street corner can be a prime location for business. On the other hand, with retail theft on the rise, it can make drugstores something of a soft target for crime. 

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This is just a snapshot of one of the many issues Walgreens  (WBA)  has struggled with in recent years. 

Increased retail theft, declining profits from prescription reimbursements, over-expansion in pricey areas, shifts in consumer behavior (we now buy things like razors, paper products, and OTC medicine online), and a troubled investment in VillageMD all contributed to Walgreens' struggles in the 2020s. 

It has agreed to go private to stabilize its business. 

But as it prepares to do so, Walgreens is making the painful decision to close hundreds of underperforming stores. 

CEO Tim Wentworth recently warned that a significant number of stores would be shuttered over the next couple of years, per WSJ.

In late 2024, Walgreens hinted that about 500 stores might close this fiscal year, but the more recent report indicates Walgreens is examining about one quarter, or a “meaningful percent” of its about 8,600 stores for potential closure.

Walgreens will also cut down on its stake in VillageMD, meaning it will no longer be its majority owner. 

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