The CEO of Walgreens has admitted that locking up items to prevent shoplifting hasn’t worked — and that it will close stores instead.
This practice has not only failed to reduce theft, but has also had a dramatic impact on sales figures.
In recent years, major retailers like Walgreens, CVS, Walmart and Target have increasingly resorted to stocking up on everyday items like toothbrushes, deodorant, laundry detergent, coffee and even milk.
This practice has led to frustration among customers, with many complaining about the inconvenience of waiting for an employee to clear basic necessities.
During an earnings call on Friday, Walgreens CEO Tim Wentworth made a surprising admission.
Despite these measures, the company reported a 52 percent increase in “shrinkage,” the retail term for inventory lost to theft.
‘If you lock things up, you don’t sell as many. We’ve proven that quite convincingly,” Wentworth admitted.
Instead, Wentworth said the company must look for “creative” solutions to combat the “hand-to-hand combat” of shoplifting.
For now, however, Walgreens appears to be addressing the problem by closing stores in areas most affected by theft.
Walgreens is increasingly locking everyday items behind glass to deter shoplifters. But it also has an impact on sales
Walgreens will close a total of 1,200 stores nationwide by 2027
Two Walgreens locations in Oakland will close at the end of February, the company announced.
It comes after the company announced it would close a dozen locations in San Francisco.
Another previously announced location in Oakland will close next week, followed by a fourth on January 30.
A Walgreens in Richmond will also close on January 30.
Wentworth told investors that the closures were part of the company’s overall plan to focus on health and wellness.
This ‘retail pharmacy-led turnaround’ includes reducing the number of stores and expanding the range of sports nutrition, superfoods and private labels.
Walgreens plans to close another 450 of its underperforming stores this year and a total of 1,200 stores nationwide by 2027.
Wentworth argued that the pharmacy chain is seeing improvements in other areas, such as digital check-ins for pharmacy patients.
Walgreens CEO Tim Wentworth said locking up items to prevent shoplifting hasn’t worked
“While we still have much work to do, this progress underpins our belief in achieving a successful turnaround,” he said on Friday.
The drugstore chain has been struggling financially for several years with slow consumer spending and low drug reimbursements.
Wentworth unveiled a series of changes last year in the hope of turning around the struggling pharmacy chain.
‘Our retail pharmacy business is central to our forward-thinking business strategy. However, increased regulatory and reimbursement pressures are weighing on our ability to cover costs associated with rent, staffing and supply needs,” Maloney shared. SFGate earlier this month.
Maloney added that “as many employees as possible” will be given the opportunity to transfer to other stores, and that customer prescriptions will be transferred to nearby stores with plans to contact customers with more information.
Wentworth previously revealed that about a quarter of Walgreens’ 8,600 U.S. stores were underperforming.
“It’s never an easy decision to close a store,” Wentworth previously said.
“We know our stores are important to the communities we serve and are committed to improving store performance.
“If closures are necessary, such as those in San Francisco, we will work with community stakeholders to minimize customer disruptions.”