Is Walgreens going out of business? This question has been on the minds of many as the pharmacy giant recently announced the closure of several of its stores in the United States and the United Kingdom.
This is one brand that has served Americans for decades, offering prescription medications, health and wellness products, and convenient photo services. However, the recent move of Walgreens to close hundreds of store locations has sprung up concerns in the minds of people concerning the brand.
Is Walgreens going out of business, really? Let’s take a closer look at the brand to get answers to questions we might have concerning them.
What is Walgreens – A Quick Look at the Brand?
Walgreens is a well-known American pharmacy retail chain, with a history dating back to 1901 when Charles R. Walgreens opened the first store in Chicago. Over the years, it has grown into a retail giant, operating over 9,000 stores in the United States and more than 2,000 Boots outlets in the UK, its subsidiary.
Since its creation, Walgreens has created a class for itself in the retail pharmacy industry by its long-standing commitment to providing accessible healthcare services and a wide range of over-the-counter products.
Recent developments have raised questions about Walgreens’ stability. In 2022, the pharmacy closed hundreds of stores across multiple locations. And in 2023, Walgreens has also announced its intention to close 200 stores in the US and 48 Boots stores in the UK. Of course, this has fueled speculation about its future.
The question on many people’s minds now is, “Is Walgreens going out of business?” are these recent moves an indication of the end for Walgreens or just a strategic move to further establish its presence in the industry?
Is Walgreens Going Out of Business?
Well, the answer here is no; Walgreens is not going out of business. While the recent store closures and financial challenges have raised concerns, it doesn’t mean the company is closing its doors soon. Instead, the company is making strategic decisions to adapt to the rapidly changing retail landscape.
Walgreens is actively addressing the challenges it faces. The closures of select stores are part of a broader effort to optimize its retail footprint and ensure long-term sustainability. By focusing on more profitable locations, Walgreens aims to remain a vital part of communities across the United States and the United Kingdom.
So, while the company faces some challenges presently, it is too early to say it is going out of business, especially with visible efforts made by the company to secure its place in the future of retail.
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Why is Walgreens Closing Hundreds of Stores?
The closure of Walgreens and Boots stores can be attributed to several factors. The first is the recent COVID-19 pandemic, which has significantly impacted the retail pharmacy industry. Health measures and changes in consumer behavior forced companies like Walgreens to adapt and make difficult decisions.
Another reason we can pin down for this multiple-store closure is the intense competition in the retail market, particularly from rivals like CVS and Rite Aid. This has put pressure on Walgreens. To stay competitive, Walgreens has been streamlining its operations, centralizing resources, and focusing on more profitable locations. In that case, they had to close down many storefronts, as we are already seeing.
Again, the digital revolution has changed how consumers now shop, with the rise of e-commerce and evolving preferences. Walgreens recognizes the importance of adapting to these changes and has invested in digital technologies and partnerships with other retailers to enhance its offerings and customer experiences.
So, when you hear about Walgreens store closures, you should think: Is Walgreens going out of business? Instead, you should know that the company is simply closing less profitable or redundant stores in specific markets to help the company stay relevant.
Who Owns Walgreens?
Walgreens is part of the Walgreens Boots Alliance, Inc., an American holding company formed in 2014 through a merger between the former Walgreens Company and Alliance Boots, a European pharmacy chain.
This merger expanded Walgreens’ global presence and made it a significant player in the retail pharmacy industry. So, who owns the company?
Well, the company is not owned by a single person or entity. Instead, its ownership lies with its stockholders. This includes institutional investors like Vanguard Group Inc. and BlackRock Inc., as well as individual investors who hold company shares in their portfolios.
What’s the Financial Situation of Walgreens – is Walgreens Facing Financial Challenges?
Walgreens’ recent financial reports present a mixed picture. While sales have seen a 4.2% increase to $36.3 billion in the third quarter, the company reported a net loss of $1.7 billion, its first quarterly loss since the 2014 merger. This loss can be attributed to the impact of the COVID-19 pandemic and store closures.
However, to address its challenging financial situation, Walgreens has initiated a $2 billion cost-saving program aimed at optimizing its retail operations and digitizing core processes. This restructuring includes store closures and a significant reduction in administrative expenses.
However, the company’s financial situation is complex, with concerns about its debt-to-equity ratio and meeting long-term obligations. But even with all of these, Walgreens maintains liquidity and generates steady cash flows. This shows that, despite facing financial setbacks, Walgreens is doing everything to ensure financial stability and future success.
CVS and Rite Aid Also in the Same Boat
Walgreens is not alone in facing store closure challenges. CVS and Rite Aid, its primary competitors, are also taking measures to adapt to the evolving retail pharmacy landscape.
CVS, for example, has merged with Aetna, a large health insurance provider, and focused on expanding healthcare services through HealthHUBs. Rite Aid is also revitalizing its brand identity and improving in-store experiences and digital presence.
Despite these challenges, Walgreens, CVS, and Rite Aid continue to vie for market share. However, Walgreens still holds a significant position in the retail pharmacy industry, ranking second in the US by prescription revenues.
Is Walgreens Going Out of Business – Final Note
The recent store closures by Walgreens have raised questions about the company’s future. However, it’s important to understand the context in which these closures are occurring. The multiple store closures are a move to better establish the presence of the brand in the market.
While Walgreens faces challenges, it remains a prominent player in the retail pharmacy industry. With strategic initiatives aimed at streamlining operations and enhancing digital capabilities, Walgreens is positioning itself for future success.
So, is Walgreens going out of business? The answer is no. Presently, the company is demonstrating commitment to establishing its presence in the market and having more edge over its competitors. And the move to close stores is part of the overall plan.
FAQs
Is Walgreens Closing Stores in the US?
Yes, Walgreens has announced the closure of several stores in the United States as part of its strategic efforts to adapt to changing market conditions. The company plans to shutter 200 locations in the US to optimize its retail footprint.
Who is Walgreens’ Biggest Competitor?
Walgreens faces competition from several major players in the retail pharmacy industry. Its main competitors include CVS Health and Rite Aid. These companies vie for market share in the highly competitive healthcare and retail sectors.
Where Does Walgreens Make Most of its Money?
The majority of Walgreens’ revenue comes from its pharmacy segment. In 2022, about 80 billion U.S. dollars was from sales by pharmacy. This makes it the largest source of income for the company.
Which Company is Bigger, CVS or Walgreens?
In 2022, CVS Health Corporation held the top position in the US pharmacy market in terms of market share based on prescription drug revenue. Walgreens Boots Alliance followed closely behind. CVS Health commanded over 25 percent of the prescription drug market revenue at that time.
What is the Most Famous Pharmacy in the US?
When it comes to the most famous pharmacy chains in the United States, Walgreens stands out, with 9,323 stores across the country. This makes it a well-known and trusted brand for healthcare and retail needs. CVS Health, Walmart, and Rite Aid also feature prominently in the list of major pharmacy chains in the US.