Walgreens To Close 450 Locations In U.S., UK In Cost-Cutting Push
Walgreens Boots Alliance is planning to close 150 U.S. locations and 300 in the UK, Chief Financial Officer James Kehoe said during the company's most recent earnings call. The company has about 13,000 locations in the U.S., Europe and Latin America.
The company hasn't specified which locations will close, or set a timetable for the closures. Kehoe called the closures part of the effort to “optimize our locations and opening hours.”
The move is also part of a wider effort to cut costs, including a recent organizational restructuring that resulted in the elimination of 500 corporate and support jobs. The company estimates that it will save about $800M in 2024 through its efforts.
The retail giant experienced a contraction in net earnings of about 60% year-over-year in its fiscal third quarter, down to $118M, which it chalked up to uncertain consumer spending patterns and less demand for Covid-related products.
“We had called out Covid as a wild card heading into the quarter, and have unfortunately seen less patient willingness to vaccinate,” Walgreens CEO Roz Brewer said on the call, noting that the company administered 800,000 Covid vaccines in the quarter, down 83% year-over-year, and that testing volumes were also down sharply.
“We are currently projecting to administer 9 million to 10 million Covid vaccines next year, in line with the typical flu season, and compared to 12.5 million Covid vaccines expected in fiscal 2023,” Brewer said.
The company is missing out on capturing some discretionary consumer spending, GlobalData Managing Director Neil Saunders told Retail Dive.
“It plods along in an inert fashion, rather than proactively adapting to changing circumstances driven by an understanding of consumer needs,” Saunders said.