FILE - Walgreens signage is seen at a store on Court Street on January 05, 2023 in the Brooklyn Heights neighborhood of the Brooklyn borough in New York City. (Photo by Michael M. Santiago/Getty Images)
LOS ANGELES - Walgreens, one of the largest drugstore chains in the U.S., has been struggling with rising costs, lower profits from prescriptions, and increased theft in stores. Customers have also been shopping elsewhere for better deals, putting even more pressure on the company.
Why is Walgreens being sold?
The backstory:
To cut costs, Walgreens has already started closing stores and reviewing its health care businesses, including its VillageMD clinics, which it may sell. Going private means the company can make bigger changes without worrying about stock market reactions.
How will this affect customers?
By the numbers:
- 1,200 stores closing: Walgreens is shutting down locations to cut costs.
- 8,500+ U.S. locations remain: Many stores will stay open, but more closures are possible.
- 3,700 stores internationally: Walgreens operates in the UK, Mexico, Thailand, and Ireland.
- 90+ years of dividends: Walgreens stopped its stockholder dividend in January to save cash.
Right now, Walgreens says stores and pharmacies will continue operating as usual, but the company is still working on a turnaround plan. That could mean more store closures or changes to services over time. Which exactly locations are closing also remains unclear.
Walgreens vs. CVS and Rite Aid: Who's adapting best?
The other side:
Walgreens’ biggest competitor, CVS, remains publicly traded and has been expanding into health care services. Other retailers, like Walmart and Kroger, have pharmacies inside their stores, offering shoppers more choices for prescriptions and everyday items.
Meanwhile, Rite Aid recently filed for bankruptcy and closed stores, showing how tough the drugstore business has become.
How Walgreens' buyout could change your shopping experience
With this deal, Walgreens hopes to fix its financial problems and stay competitive, but it still has major challenges ahead. The company has already cut costs, closed stores, and reduced investments in outside businesses.
While Walgreens says it will continue serving customers as usual, the impact of the buyout will become clearer in the coming months as the company moves forward with its turnaround plan.
The Source: This report is based on Walgreens Boots Alliance’s buyout announcement, statements from Sycamore Partners, and financial analysis reported by the Associated Press.