Pressure on the US Consumer: Walgreens Closes More Stores and Lowers Annual Forecast

The pharmacy chain Walgreens is facing a new wave of store closures in the United States. According to the parent company, this move is a response to the unsatisfactory third-quarter results and weaker consumer spending. Tim Wentworth, the CEO of Walgreens Boots Alliance, reported during a conference call that American consumer enthusiasm has noticeably diminished. In the wake of these financial reports, Walgreens has revised its profit expectations for the current year downward. A particular challenge is the price sensitivity and selective purchasing decisions of customers, which have been increasingly felt due to high inflation and shrinking savings. The company's stock fell more than 20 percent on Thursday and has already lost 40 percent of its value since the beginning of the year. In February, Walgreens had already closed 625 U.S. stores. The company did not provide specific figures on the number of additional impending closures, but it indicated that about a quarter of non-strategically important locations could be affected. This "significant multi-year" cost reduction program is likely to impact a large portion of the approximately 8,700 stores nationwide. To counteract the declining demand, Walgreens announced last month that it would reduce prices on over 1,300 products. This measure followed a similar initiative by Target. The disruptions in consumer behavior are particularly affecting lower-income consumers, further increasing the pressure on the retail sector.