LOCAL RETAIL DRUGSTORES CLOSING UP

When you’re under the weather, your local pharmacy is there for you to stock up on all the essentials to get you feeling better. But access to your favorite retail pharmacy – whether Rite Aid, Walgreens, or CVS – may change soon as all three companies continue to shut down hundreds of stores nationwide.

These store closures are driven by more and more consumers getting their goods online through services including Amazon and other online RX retailers such as Postal Prescription Services. This change in the retail landscape has caused many companies to suffer financially, especially large pharmacy chains.

One chain particularly affected by this shift in consumer spending is Rite Aid. The national drug store chain officially has filed for Chapter 11 bankruptcy protection, and vowed to accelerate its pace of store closures and sell off a number of subsidiaries (companies owned by Rite Aid), per a statement released Oct. 15. Out of about 2,220 stores in the United States, the pharmacy retail giant plans to close between 400-500 stores during its company restructuring. In the press release, Rite Aid attempted to reassure its customers that “The Company [Rite Aid] is making every effort to ensure customers…have access to health care services.”

The main reason for Rite Aid’s troubles is its consistent, year-over-year loss in revenue. A total of nearly $3 billion in losses over the past six years has put it in a dire financial situation.

The ease of use and fast shipping of online retailers have drawn away consumers from retail pharmacies. More are choosing to have their prescriptions shipped, at lower cost, directly to their doorstep.

Another factor that cannot be left out is the rise in theft and vandalism in these neighborhood pharmacies. Theft (shoplifting) has become a severe problem for the big drug store chains. Some locations have started to increase security and to lock up higher-priced items, but these measures have caused the customer experience to deteriorate.

Walgreens is a second chain that has been hit hard by this big shift. The company said in 2019 it would close 200 stories in the U.S. and now is planning to close another 150 locations by the end of August 2024, a spokesperson said.

Along with the store closures, Walgreens plans to cut its costs by $1 billion in 2024 by eliminating more than 500 corporate and office support staff positions, as stated in an earnings call by Walgreens CFO James Kehoe.

And, just like Walgreens, CVS now plans to close 150 U.S. stores in addition to 244 locations it closed in 2018-20.

All three of these retail pharmacy chains’ financial troubles are a testament to how consumers are shifting how they buy their wellness goods. With more than 1,700 drugstores set to close by the end of 2024, don’t be surprised if your neighborhood Rite Aid, Walgreens, or CVS shuts its doors for good.