After its parent company announced plans earlier this year to close 200 stores in the United Kingdom, Walgreens is looking to shutter 200 locations in the United States. The pharmacy chain aims to save $1.5 billion by fiscal 2022 in annual expenses, CNBC reported.
Walgreens said in a statement, according to the outlet, “As previously announced, we are undertaking a transformational cost management program to accelerate the ongoing transformation of our business, enable investments in key areas and to become a more efficient enterprise.” A spokesperson for the pharmacy chain said it doesn’t intend to release a full list of store closures.
The store closures are said to comprise under 3 percent of the company’s 10,000 United States locations. In a statement, as reported by the outlet, Walgreens anticipates “minimal disruption to customers and patients.” It also foresees retaining “the majority” of employees in locations that are in close proximity. The news represents the biggest round of store closures for Walgreens since 2015.
At that time, the retailer also shuttered 200 locations. Its parent company purchased 1,932 stores of Rite Aid last year and has shuttered 631 of those locations since then and is looking to close an additional 119. When it comes to other pharmacy chains, CVS said in May that it would shutter 46 underperforming stores.
In separate news, a UBS report warned that an estimated 75,000 stores are likely to shut down by 2026. Analysts said the closures would affect a variety of retailers, including an estimated 10,000 consumer electronics stores, 21,000 apparel stores, and 8,000 home furnishing stores.
The reason for the closures can be attributed to the fact that more Americans prefer to shop through the web. UBS reported that the average household in the U.S. spent $5,200 online in 2018, an increase of nearly 50 percent from five years earlier. The report also noted that online shopping is expected to make up a quarter of retail sales, with approximately 16 percent of overall sales made online.