Walgreens to shutter 150 stores in U.S., 300 stores in U.K.
Walgreens is set to close 150 stores in the United States and an additional 300 locations in the United Kingdom.
The news about the closures was delivered by James Kehoe, chief financial officer, during Walgreens Boots Alliance’s Q3 2023 earnings call on June 27.
Kehoe pointed out that capital allocation priorities remain focused on core business investments, debt paydown and the retailer’s dividend. “We will continue to pursue disciplined returns-based organic investment in our core business," he added. "And we are simplifying our portfolio to unlock value and provide financial flexibility. We are very committed to maintaining our investment grade rating and our dividend. Now, let's take a quick look at the transformational cost management program. We are raising the cumulative 2024 savings target to $4.1 billion. And this is the sixth target increase since the program began.”
[Read more: Retailer of the Year 2021: Walgreens seizes its omnichannel opportunity]
Walgreens is projecting at least $800 million of savings in 2024, and Kehoe said that cost saving initiatives include an organization restructuring that included transforming its headquarters to better align its resources with its strategic priorities. “This led to the elimination of more than 500 roles, representing around 10% of our corporate and U.S. support office workforce,” Kehoe said.
[Read more: Walgreens eliminates task-based metrics for pharmacy staff]
Pointing out that Walgreens’ pharmacy of the future operating model will drive significant savings, Keho said the company is optimizing the model through its micro fulfillment centers, tech-enabled centralization of in-store activities and tele-pharmacy solutions. “These initiatives will also elevate the role of the pharmacist and improve patient engagement,” Kehoe added.
Lastly, Kehoe said, “Finally, we will continue to optimize our locations and opening hours, and expect to close an additional 300 locations in the U.K. and 150 locations in the U.S. As you have seen, we are accelerating our portfolio optimization to further simplify the business. We are fully exited from our Option Care Health position, with overall proceeds of $1.2 billion since August 2022.”