Walgreens announces the closure of several Southern California stores as part of a larger strategy to optimize its retail footprint amid financial challenges.
At a Glance
- Walgreens plans to close five stores in Southern California by late March
- Closures are part of a larger plan to shut down 1,200 stores over three years
- Regulatory pressures and financial challenges cited as reasons for closures
- At least 93 employees could be affected, with efforts to redeploy most to other stores
- Company emphasizes strong performance of retained stores in turnaround strategy
Walgreens Announces Southern California Store Closures
Walgreens, one of America’s largest pharmacy chains, has revealed plans to permanently close five retail locations in Southern California. The affected stores, situated in Whittier, Los Angeles, Orange, Placentia, and Stanton, are set to shut their doors by late March. This move is part of a broader strategy to streamline operations and address ongoing financial challenges faced by the company.
The decision to close these stores comes as Walgreens grapples with what it describes as “increased regulatory and reimbursement pressures.” These pressures have significantly impacted the company’s ability to cover essential costs such as rent, staffing, and supplies, forcing it to reevaluate its retail presence in certain areas.
Part of a Larger Optimization Strategy
The Southern California closures are not isolated incidents but rather part of Walgreens’ comprehensive “footprint optimization program.” This initiative aims to reduce the company’s total number of locations by approximately 1,200 over a three-year period. For the fiscal year 2025 alone, Walgreens expects to close around 500 stores across the United States.
“Currently, we see comparable front end sales in our retained store fleet outperforming those stores slated to close this year by approximately 250 basis points and comparable pharmacy scripts by approximately 390 basis points,” the company said.
This strategic downsizing is crucial for Walgreens’ overall turnaround plan. By focusing on more profitable locations, the company aims to create a leaner, more efficient retail operation that can better withstand the challenges of the current market environment.
Impact on Employees and Communities
The closure of these five Southern California stores is expected to affect at least 93 employees. These include pharmacy technicians, pharmacists, cashiers, customer service associates, store managers, and inventory specialists. However, Walgreens has stated its intention to redeploy most of the affected employees to other locations within the company.
Recognizing the impact these closures may have on local communities, Walgreens has committed to working closely with community stakeholders to minimize disruptions for customers. The company emphasizes its dedication to serving these communities and aims to ensure a smooth transition for affected patrons.
Walgreens’ decision to close these stores reflects broader challenges facing the drugstore industry. Since the pandemic, major pharmacy chains have struggled with changing consumer habits and financial burdens, including those stemming from opioid-related settlements. Competitor Rite Aid, for instance, recently closed 31 stores in California as part of a bankruptcy restructuring plan, citing declining sales and legal issues related to opioid lawsuits.
