US Pharmacy Chain 'Walgreens' Tightens Belt... Store and Workforce Restructuring

Impact of Consumer Spending and COVID Vaccine Demand Decline
Additional Closure of 150 Stores in the US and 300 Stores in the UK

The large American pharmacy chain 'Walgreens' is tightening its belt by pushing forward with store and workforce restructuring.

According to major U.S. media outlets on the 30th of last month (local time), James Kehoe, Walgreens' Global Chief Financial Officer (CFO), announced in the recent quarterly earnings report plans to close an additional 150 stores in the U.S. and 300 stores in the U.K. (Boots).

Photo by AP [Image source=AP Yonhap News]

Earlier, on the 27th of last month, Walgreens reported that its Q2 net profit decreased by $730 million (approximately 930 billion KRW) compared to the same period last year. CNN reported that Walgreens is struggling due to reduced consumer spending and decreased demand for COVID-19 vaccines.

In response, Walgreens' CEO Rosalind Brewer stated that the cost-cutting target has been raised to $4.1 billion (approximately 5.4 trillion KRW) and that immediate measures are being taken to optimize revenue in the U.S. healthcare sector.

CFO Kehoe explained that "Walgreens expects to reduce costs by $3.3 billion by the end of this year and cut at least an additional $800 million next year," describing store closures as part of the cost-saving efforts. He added, "We anticipate that technological advancements and the opening of future-oriented pharmacies will promote cost reductions," and noted, "We are optimizing our model through micro-fulfillment centers, stores using advanced technology, and remote pharmacy solutions."

Walgreens did not disclose the specific locations of the stores to be closed, but a spokesperson stated that all procedures for U.S. stores are planned to be completed by the end of August next year.

Founded in 1901, Walgreens currently operates more than 9,000 stores domestically and internationally. After acquiring New York pharmacy chain Duane Reade for $1.1 billion in 2010, it aggressively expanded by acquiring European pharmacy chain Boots Alliance for $5.3 billion in 2014 and purchasing 2,000 stores of the industry’s third-largest chain, Rite Aid, for $4.4 billion in 2017.

However, since 2019, Walgreens has prioritized cost reduction by aggressively restructuring, including closing underperforming stores and laying off 10% of its headquarters staff.

This content was produced with the assistance of AI translation services.