Why are Walgreens and CVS closing thousands of stores?

Walgreens, one of the largest pharmacy chains in the United States, has announced plans to close a significant number of its approximately 8,600 stores. The decision comes at a time when the pharmacy industry is facing a number of challenges, including theft, competition and failed growth strategies.

Walgreens' problems

According to CEO Tim Wentworth, roughly 25% of Walgreens $WBAstores are unprofitable. The company plans to close stores that are close together or that have theft problems. Since the pandemic, Walgreens and other retailers have experienced an increase in theft, which has led to stores with high theft rates closing or locking up merchandise. However, Walgreens' problems go much deeper and include competition and failed growth strategies. The company admitted last year that it underestimated the impact of theft on its business.