Why Walgreens Is Shuttering 1,200 Stores While Pharma Sales Soar To $722 Billion

Walgreens is pulling the plug on 1,200 stores over the next three years. That's no small cut. And they're not the only ones feeling the squeeze. Business Insider reported that CVS and Rite Aid are scaling back too. So, how does a business in the middle of a $722 billion industry end up here?

Let's break it down.

Big Numbers, Bigger Problems

Pharmacies should be killing it. Seven out of 10 Americans rely on prescription meds. That's a steady stream of cash, right? Not quite. Walgreens says a quarter of their stores are losing money. CVS is slashing 3,000 jobs and closing hundreds of locations. Rite Aid? They're stuck in bankruptcy mode, shutting stores to stay afloat.

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The stores that survive aren't faring much better. Shelves are half-empty. Everything is locked up. And finding someone to unlock that deodorant? Good luck with that scavenger hunt.

What's Eating Pharmacies Alive?

It's not just Walgreens and CVS. Convenience stores like 7-Eleven are shutting down, too. Blame it on what people are calling the "retail apocalypse." COVID-19 may have kick-started it, but this isn't just a pandemic problem.

Elizabeth Anderson, a health care analyst, told BI, "None of these things is a new factor. But you compound that for years and years and eventually, you get to kind of a breaking point."

That breaking point? It's here.

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Amazon And Friends Are Winning

Who needs a pharmacy run when Amazon can drop your ibuprofen, snacks and toilet paper on your doorstep? Often cheaper and easier.

Amazon isn't the only threat; Walmart and Target are grabbing pharmacy customers. Last year, Walmart launched same-day pharmacy delivery. Even Dollar General is in the mix, snagging budget-conscious shoppers. The more annoying pharmacies make it to shop – locked shelves, anyone? – the faster people bail.

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Pandemic Boost? That's Over

The pandemic gave pharmacies a brief lifeline. Vaccines and COVID test kits drove foot traffic and revenue. But that wave has passed and the problems that were always there are now front and center.

Can Pharmacies Make A Comeback?

Walgreens and CVS are trying to adapt, but the game has changed. People want convenience. They want low prices. And they won't stick around for stores that don't deliver.

For now, the closures keep coming. If pharmacies don't evolve fast, this could just be the start.

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