​​The Retail Woes of Drugstores

By: Anneken Tappe · October 18, 2023 · Reading Time: 2 minutes

Struggling Sector

The nation’s largest drugstore chains, including CVS (CVS), Walgreens (WBA), and Rite Aid, have been closing stores en masse as they battle various issues.

This industry-wide downturn is making it more difficult for certain communities to get prescriptions filled and access other healthcare essentials.

High Cost of Convenience

Chains have closed locations due to competition from other retailers venturing into the pharmacy space, including Amazon (AMZN), Walmart (WMT), and Dollar General (DG). And even though this trend is industry-wide, the major drugstores are also facing unique issues.

Rite Aid has found itself in perhaps the most difficult position of them all. Competition from rivals, a large debt load, and expensive legal battles stemming from the opioid crisis have caused intense pressure for the chain, which filed for Chapter 11 bankruptcy protection earlier this week.

Meanwhile, Walgreens has faced strikes from pharmacists and technicians. On recent earnings calls, executives have also cited theft as an impact on the company’s bottom line.

Store Closures

In response to these headwinds, most major pharmacy chains have already announced significant store closures. CVS plans to close 900 stores by 2024. Walgreens said in June it would close 150 stores, and Rite Aid will shutter up to 500 stores in the wake of its bankruptcy filing.

But what might help companies’ financials, could put consumers in a pinch as access to essentials and medicines is becoming worse, particularly in low-income neighborhoods.

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