DEERFIELD, Ill. — Walgreens Boots Alliance has declared it will close a “significant portion” of its underperforming stores, which it says make up about 25% of the chain’s store base. Chief executive officer Tim Wentworth made the announcement during the company’s third quarter conference call last month.
However, the decision to shutter an as-yet unfinalized number of locations was not a sudden response to disappointing third quarter results that prompted management to cut its full-year earnings guidance. Rather, it was the result of an extensive strategic and operational review undertaken after Wentworth’s appointment as CEO last October.
He prefaced his discussion of the planned closures by emphasizing the ongoing importance of the retail pharmacy business, not only to Walgreens but to the health care industry as a whole. “With widespread demand for convenient health care solutions, the pharmacy and pharmacists have never been more important,” Wentworth told analysts. “Our retail pharmacy business is uniquely positioned to expand the role we play in the lives of our patients, who have come to expect and need retail pharmacy at the center of their care.”
The success of the business, though, requires providing an efficient and relevant customer experience, he added, and the company has launched a multifaceted action plan to improve that experience. However, Wentworth cautioned, the customer has evolved and customer demographics and preferences have changed. Consequently, Walgreens needs to reposition its stores and operate them accordingly.
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