Why are Drug Store Chains and Independent Pharmacies Closing Down? Exploring the Reasons

Money | June 28, 2024, 1:14 p.m.

Walgreens has announced plans to close a significant number of its 8,600 stores in the US due to profitability issues. Approximately 25% of Walgreens' stores are not making money, leading to closures of stores in close proximity or struggles with theft prevention. The pandemic has exacerbated these challenges, with the chain facing competition and failed growth strategies. Other drug store chains, such as CVS and Rite Aid, are also experiencing closures and financial difficulties due to falling reimbursement rates for prescription drugs. These challenges are impacting the profitability of drugstores' prescription business, while the sale of snacks and household items at the front end is declining as online retailers like Amazon and big-box chains gain popularity. The shift towards primary care services in drug stores has not been profitable either. While store closures may benefit companies financially, they have negative effects on consumer access to healthcare, particularly for older adults and lower-income households.