Walgreens is pressing on with its “Footprint Optimization Program” and shuttering hundreds of locations in an effort to streamline operations and prioritize its core retail pharmacy business.

In October, the company said it would be closing about 1,200 stores over the next three years, including 500 in the current fiscal year that ends on August 31.

Walgreens told Newsweek that while it does not provide comprehensive lists of store closures, it remains “on track” to meet this year’s target.

Why It Matters

Walgreens operates more than 8,000 stores across all 50 states and is one of several drugstore chains to consolidate stores in an effort to stave off financial pressures and compete in an increasingly challenging retail environment. The closures, and those of rivals like CVS and Rite Aid, have raised concerns that this will contribute to an increase in the number of “pharmacy deserts” across the U.S., areas where Americans are left without adequate access to prescriptions and vital medications.

What To Know

In October 2024, Walgreens announced that it would be closing 1,200 stores over the next three years after reporting a net loss of $3 billion in its fourth quarter. This compared to a net loss of $180 million the year prior and primarily reflected charges relating to opioid lawsuits from previous years.

Keonhee Kim, health care equity analyst at Morningstar, told Newsweek that the main factor underlying Walgreens store closures and the wider consolidation of pharmacies across the country has been “prescription reimbursement pressures” that drugstores face from Pharmacy Benefit Managers (PBMs). PBMs handle prescription drug plans and act as middlemen between insurance companies, drug manufacturers and pharmacies. The reduced amount they are paying the latter has, according to Kim, “weighed down pharmacy bottom lines.”

Patrick Aguilar, managing director of health at Washington University’s Olin Business School, agreed that PBMS have “grown to represent a significant negotiating challenge for retail pharmacies.” However, he told Newsweek that their declining success is also attributable to wider difficulties faced by the retail sector.

“Twenty-five years ago, sales of non-pharmacy products made up around 40 percent of revenue for large pharmacy chains,” Aguilar said. “The rise of online shopping, particularly for recurring purchases of regular household items, posed a significant challenge to overall firm performance.

“Decreased revenue from both pharmacy and non-pharmacy sales combined with increase costs, particularly among labor, to create significant challenges in the industry.”

Dr. Lucas Berenbrok, associate professor at the University of Pittsburgh’s School of Pharmacy, believes the best way to prevent further closures is to “consider policies that protect and promote growth of pharmacy businesses.”

Berenbrok’s recent research looked into which populations are most vulnerable to pharmacy closures and sought to classify and identify “keystone pharmacies.” These are defined as “critical pharmacy locations whose closures would directly create a pharmacy deserts,” and should be treated as particularly important in “prevent[ing] further inequities in pharmacy access.”

Where Is Walgreens Closing Locations?

Data analytics platform Usearch has collected information on upcoming or completed Walgreens closures by compiling information from local news reports. It has identified nearly 300 locations that have been marked for closure or already shuttered under the company’s ongoing footprint optimization strategy.

California has seen the largest number of closures with 35, according to Usearch’s calculations. It is followed by Massachusetts with 28 and Colorado with 20.

The latter two are among those expected to see more stores shuttered in the coming weeks, specifically:

Colorado

• 950 S. Quebec St., Denver, on September 8
• 6200 E. Colfax Ave., Denver, on September 10

Massachusetts

• 585 Washington St., Dorchester, Boston, on September 10

What People Are Saying

Walgreens, as quoted in The Hill earlier this year: “It is never an easy decision to close a store, and we know how important they are to the communities we serve and therefore do everything possible to improve their performance. When closures are necessary, we will work in partnership with community stakeholders to minimize customer disruptions.”

Walgreens CEO Tim Wentworth, in the company’s annual results: “In fiscal 2025, we are focusing on stabilizing the retail pharmacy by optimizing our footprint, controlling operating costs, improving cash flow, and continuing to address reimbursement models to support dispensing margins and preserve patient access for the future.

“Fiscal 2025 will be an important rebasing year as we advance our strategy to drive
value creation. This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term.”

Keonhee Kim, Morningstar equity analyst, health care, told Newsweek: “Store consolidation allows stores to share fixed costs like rent and ideally be more efficient with variable costs like labor, ultimately benefitting margins. But this all depends on the store’s ability to absorb prescription volume of nearby stores that closed. If patients choose to go to a competing pharmacy or opt for an alternative method [such as mail order] to receive prescription, we think the benefits of store consolidation are muted.”

Patrick Aguilar, managing director of health at Washington University’s Olin Business School, told Newsweek: “Consolidation offers the hope that efficiencies will reduce costs to accommodate declines in revenue. It remains to be seen whether patients will find the consolidated options to be superior to online prescription retailers or mail order services.” He added that the closures will mean “even worse access for patients,” particularly for medications that treat newly emerged conditions and those in small and rural areas.

Lucas Berenbrok, professor at the University of Pittsburgh’s School of Pharmacy, told Newsweek: “The community pharmacy is a foundational piece of our American health system. Pharmacies have historically been very accessible locations for which patients can ask and receive medication-related advice from a highly educated and trained professional, the pharmacist. But as pharmacies, both corporate chains and independently owned locations, continue to close, access will decrease, including in areas with already low access like rural U.S. communities.”

What Happens Next

The drugstore chain has said it will transfer prescriptions of those affected by the store closures. Additional information on how to do this can be found on the Walgreens website.