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Walgreens Will Close 1,200 Stores, Hoping For A Turnaround
Walgreens will close 1,200 stores over three years, the company announced on Tuesday. Justin Sullivan/Getty Images hide caption
toggle caption Justin Sullivan/Getty ImagesWalgreens plans to close 1,200 stores over the next three years, the pharmacy chain said on Tuesday. It's part of the company's plan for a turnaround, as it faces retail competition and lower prescription payouts.
Chief Executive Tim Wentworth said about a quarter of the company's stores are unprofitable. Walgreens has been on a $1-billion cost-cutting spree. It's already been shutting some stores, shaking up leadership and renegotiating its deals with insurers.
Walgreens, which also owns the British drugstore chain Boots, reported a net loss of $3 billion in the latest quarter. This was actually better than expected, with sales growing 6%.
Sponsor MessageWalgreens isn't the only big pharmacy chain attempting a turnaround. Rite Aid last month emerged from bankruptcy; CVS has also closed stores and reportedly weighs a breakup to undo its mergers with the insurance company Aetna and with Caremark, a pharmacy benefit manager.
Health CVS and Walgreens agree to pay $10 billion to settle lawsuits linked to opioid sales The convenience-store part of pharmacy chains has been losing shoppers to Amazon, Walmart, Costco, grocery stores and dollar stores. Many of those rivals also fill prescriptions, competing for pharmacy customers, too.
Pharmacy chains have over-expanded to thousands of locations over the years, signing long-term leases for pricey corner locations. But many shoppers have criticized the quality of the stores, complaining about understaffing and the inaccessibility of items that are locked up to prevent theft. Pharmacies, for their part, have complained about shrinking profits for filling prescriptions, citing dramatic declines in reimbursement rates.
In light of these challenges, CVS and Walgreens have looked for profits elsewhere. They've tried to add primary-care clinics, a project that costs a lot of time and money. The chains have also proposed new payout structures for prescriptions, with Walgreens on Tuesday warning that it would be "willing to walk away from a line of business, if it doesn't make sense."
Business Have a complaint about CVS? So do pharmacists: Many just walked out "I'm very confident that over a two- to three-year period we will have reset the framework for reimbursement discussions," Walgreens CEO Wentworth told investors on Tuesday.
He also added that Walgreens is focusing on adding more store-brand products to its chain. That tactic has been successful for Boots in Britain, though it has not done as well in the U.S. So far. Wentworth also said the chain would work to re-hire workers from stores that will close and added that overall, "Many of our actions across this turnaround will take time."
Asthma Sufferers At Risk Over Poor Inhaler Technique
Paul Wilson ran the 2018 London Marathon for Asthma UK
Paul Wilson has been hospitalised 48 times as a result of his asthma - and he has had to be resuscitated on 25 occasions.
But last year the 44-year-old from Beith, North Ayrshire, managed to run the London Marathon.
He says his health improved markedly after a vital appointment with an asthma nurse about his inhaler.
Now he is backing a new campaign urging others to use their medication properly.
Experts say more than a million people in the UK could be at risk of a life-threatening asthma attack as they do not get their inhaler technique checked.
Mr Wilson admits he missed out on vital inhaler technique checks with his GP as he did not attend his annual asthma reviews.
He said: "I've been rushed to hospital countless times with my asthma, and been put on drips, nebulisers, and even ended up in intensive care.
"But I'd never really given too much thought on how to manage my asthma or use my inhaler properly.
"Looking back, I was just taking a puff and hoping for the best."
The consequences of his poor technique could have proved fatal.
He added: "My symptoms were getting so severe that it got to the point where I was having an asthma attack every week.
"I would wake up in the middle of the night gasping for breath and it felt like someone was sitting on my chest."
The results of an appointment with his asthma nurse to review his medication were startling.
Mr Wilson recalled: "They said the way I was using my inhaler meant that only 10-20% of the medicine was getting into my lungs.
"They showed me the correct inhaler technique and gave me a spacer to use, and the difference it has made to my asthma is incredible.
"I even ran the London Marathon for Asthma UK last year.
"I never thought that something so simple could completely turn my life around."
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An Asthma UK report found nearly one in five (19%) people are not getting their inhaler technique checked.
The charity said research also shows that almost half of people with asthma are not using their inhaler properly, often without realising.
This means the full dose of medicine cannot get into their lungs where it is needed to protect them from a life-threatening asthma attack.
Instead the medicine stays in their mouth or the back of their throat, which can also make people more likely to experience side effects such as oral thrush and a sore throat.
According to national guidelines, everyone with asthma should get their inhaler technique checked as part of their yearly asthma review with their GP or asthma nurse.
The charity has also launched videos on its website which demonstrate how to use more than 21 different inhalers, spacers or nasal sprays including pMDI, Turbohaler and HandiHaler.
It is also urging patients and parents of children with asthma to attend their asthma reviews and watch the videos with their GP or asthma nurse so they can be mindful of how to use their inhaler properly.
Common mistakes include breathing too forcefully or not forcefully enough, not breathing in deeply enough, or not preparing their inhaler properly, such as shaking it before use.
If people are struggling to get their inhaler technique right, it can also help if they use a spacer, a hollow chamber that attaches to the inhaler and makes it easier for the medicine to get into the lungs
Dr Andy Whittamore, clinical lead at Asthma UK, said: "Inhalers are the bread-and-butter treatment for most people with asthma, so it's really worrying that many people are not taking them properly, or getting their technique checked by their GP or asthma nurse.
"With so many different types of inhaler which are all used in different ways, it can be difficult for patients and healthcare professionals to know the correct way to use them.
"It's also easy for patients to get into bad habits or simply forget the best technique following their appointment, especially if they have a new type of inhaler.
"But even a small tweak to how someone uses their inhaler can make a huge difference and could prevent them having a life-threatening asthma attack."
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Walgreens Is Closing 1,200 Stores
New York CNN —
Walgreens is closing approximately 1,200 locations as the drug store chain struggles to contend with online competitors and declining prescription drug payments.
By 2027, about one in seven Walgreens currently open will close its doors. About 500 Walgreens will close its doors over the next year, the drug store chain announced Tuesday.
Those closures represent a significant escalation from a few months ago, when the financially struggling company announced in June it was shutting 300 underperforming locations as part of a multi-year optimization program under CEO Tim Wentworth. At the time, the company had said about a quarter of Walgreens stores were unprofitable, and the chain promised "imminent" changes.
Still, the company managed to post stronger-than-expected sales in the past quarter. Revenue at the chain rose 6% from the same quarter a year ago, but Walgreens reported a $3 billion loss largely because of a writedown of a Chinese pharmaceutical chain and a home care provider called CareCitrix.
The latest tranche of closures is "emblematic of a company that is in trouble and is trying to course correct," according to Neil Saunders, retail analyst and managing director at GlobalData Retail.
"Walgreens spent years building its business through acquisitions and neglected the fundamentals of its stores and its retail operations," he told CNN. "That has pushed a lot of outlets into a position where they are losing sales and are not generating a return."
Shares of Walgreens (WBA) rose nearly 4% in premarket trading. However, its stock is down nearly 70% for the year.
The closures come amid a challenging time for drugstore chains, which are being hammered on a few fronts.
Major drugstore chains, including CVS and Rite Aid, have struggled in recent years because of declining profits from filling prescriptions. They've declined because of lower reimbursement rates for prescription drugs and new competition from Amazon.
Earlier this month, CVS announced it was cutting about 2,900 jobs as part of a $2 billion in cost savings initiative. The layoffs, which affect mostly corporate jobs, add to the 5,000 or so job reductions disclosed last year.
The front-end of drugstores, where they sell snacks and household staples, also face pressure from larger competitors, including Target, and even Dollar General's growth has also hurt drug store chains in rural areas.
In May, Walgreens slashed prices on more than 1,000 items, following rivals in an effort to lure back inflation-weary shoppers turned off by high prices.
CEO Wentworth said in a statement that the "turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term."
For Saunders, Walgreens' eliminating the "dead wood will help the company strengthen its financials over time, but it is a huge admission of failure."
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