Why Walgreens And CVS Are Shutting Down Thousands Of Stores

In its fiscal third-quarter report, Walgreens announced its plans to close a ‘significant’ amount of stores, acknowledging only 75% of its 8,600 stores were profitable. While no specific stores were tapped for closure yet, more than 2,000 locations could face the chopping block by 2027. This just the latest sign of trouble for the struggling retail pharmacy sector as CVS and Rite Aid both announced large closures in the past year. Watch the video above to learn why U.S. pharmacy chains are fighting for survival.

Chapters:
0:00 Introduction
1:17 What Went Wrong
4:10 The drug pricing problem
7:04 The impact of pharmacy deserts
10:03 What’s next?

Produced by: Devan Burris
Edited by: Darren Geeter
Animation: Christina Locopo, Jason Reginato
Senior Managing Producer: Tala Hadavi
Additional Footage: Getty Images, CVS, Rite Aid

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Why Walgreens And CVS Are Shutting Down Thousands Of Stores

[Distortion]

"We jacked up prices and made customer service worse, why is our business failing!?"

[bluecube]

1 employee to stock shelves, run photo center, be cashier, do online shopping, help customers, pull old product... ONE PERSON

[hometowngirl]

Walgreens treats their store staff awfully. They cut hours every month but expect staff to do the same amount of labor. The pharmacies are staffed even worse.

[TorgoHiggins]

As a nearly 15-year employee with one of the two big chains, all of this fallout is entirely self-inflicted by pure, unmitigated greed and overreach.

[kaylaEA_]

Not only did they lock up the soap, they reduced staff so the person the responds to your request to unlock is the same person restocking and checking out customers.

[micheleslaughter]

No insurance should be able to dictate where you can fill your prescription. It let's conglomerates suffocate competion.

[mylesfranklin]

If you ever consistently shopped at these stores, you're either rich or bad with money. The markups are ridiculous!!

[jaketron.seattle]

Over the years, the stores have started to feel more dirty, and have less items.

[i.m.]

I quit shopping at CVS and Walgreens over a decade ago, if not longer. Why in the world would I pay such high prices when I can get the same item at Walmart or Costco for a fraction of their prices? I went into CVS to get a flu shot last season and couldn't get over the prices. The markups are astronomical!

[fuzzyschwartz]

Walgreens bought the drugstore in my hometown only to just shut it down and transferring all the prescription data to a store that was 20 miles away. Their plan backfired when a citizen of our small town was going to school to be a pharmacist they graduated the same year Walgreens did this. They then opened up a drugstore across the street from the drugstore that Walgreens bought and now sits empty.

[paddyoak]

I remember applying for jobs at CVS a few times. The managers who interviewed me were arrogant and rude. I couldn’t even imagine working there.

[erikthorne]

In North Dakota the pharmacist has to own the store. It came up for a vote to let Walgreens and CVS open stores and the people said no.

[Thefallofcapitalismishere]

Their prices are so ridiculous, it's a miracle it took this long.

[wobblemind]

The pharmacies in the US are weird. In most other countries, you find them everywhere and they're private and small practices. The corporate bs has got to stop.

[BrooksBray]

They're blaming it on inflation. Why people have no money? It couldn't simply be because every single corporation that's in the retail business is price gouging. And shrinkflation is out of control. Nope, couldn't be that. Yeah it's definitely theft. That's why. When you can, go behind a Walgreens and look through the dumpster and see thousands of dollars of merchandise in the dumpster instead of selling it or giving it to needy people. Absolute greed.

[grahamjones]

1. Make the stores smaller.
2. Sell alot less crap.
3. Stop trying to be the dollar store of pharmacies.

[plasticwax]

I worked at Walgreens for 12 years. Corporate used shrinkage as part of unrealistic profit goals to not give raises while store managers and upper management were given ridiculously high bonuses. When they went to a rewards program, employees were highly stressed to push that over keeping customers happy. We were pushed to get as much customer information as possible while getting yelled at on a daily basis. Chain/corporate pharmacies are terrible. The pharmaceutical control over this government should sincerely be investigated. But that'll never happen.

[joshuam]

Worked at Walgreens for 7 years and watched the seeds of this downfall. It all starts with someone up top needing to make more money than the guy they replaced so they cut hours, cut benefits, etc. and now no one wants to work for them or buy from them.

[Inferno]

I don't get why whenever a chain starts closing stores, or chains that already failed, these "analysts" always say "the stores look the same as they did thirty years ago" . . as if THAT'S the problem. Whenever a store goes down, the people I talk to always say, "I quit going there because it was dirty, and poor customer service, and high prices". Nobody ever says "Well. they haven't remodeled the place so I quit going"

[patriciaturnham]

My daughter works for CVS, and they have 2 massive problems - high front of house prices, and massive mismanagement by corporate of the pharmacies. The company just instituted a new phone system that makes it impossible for a customer to speak with a human. They regulate worker hours, so there are not enough people to keep up with prescriptions. This is clearly a failure of management.