The news: Walgreens is scaling back its store closure plans. The retailer will now shutter about 100 locations this year, per Drug Store News, well below the 700 previously planned for 2026. Walgreens currently operates about 8,000 stores after closing 500 during fiscal year 2025. With another 100 closures, Walgreens will have shuttered roughly 600 stores over two years, half of what it originally planned.

How we got here: Walgreens went private last year when it was acquired by Sycamore Partners. The retailer lost nearly $12 billion in the two years leading up to the sale—ranking it among the largest losses of any Fortune 500 company, per Yahoo Finance.

Pharmacy reimbursement pressures, declining front-of-store sales, and a failed investment in primary care chain VillageMD were the biggest drivers of its struggles. This is what led to the plans to close roughly 1,200 underperforming stores, announced by then-CEO Tim Wentworth in 2024. At that time, Wentworth said about one-quarter of Walgreens stores were not profitable.

Why it matters: Retail pharmacy headwinds have not eased much over the past year, with pressures affecting the sector broadly. But Walgreens’ scaled-back closure plan signals it still sees value in maintaining a broad physical footprint.

Walgreens’ commitment to physical retail comes as rival CVS plans to open more stores than it closes for the first time in years. New Walgreens CEO Mike Motz (who previously led Staples’ US retail operations) may bring a different operational focus, shifting away from expensive healthcare diversification into primary care clinics and back toward core retail and front-of-store business. Walgreens announced this week the opening of six new locations.

Fewer store closures will preserve pharmacy access in areas where Walgreens planned to pull back. Some communities have organized protests and public meetings over local pharmacy closures. Previous polling during the height of pharmacy store shutdowns found that 59% of US consumers said they worried about being able to get medications close to home as a result.

Implications for pharmacies: Walgreens will need to adapt to changing shopping habits and give consumers more reasons to visit its stores. While Walgreens will close some stores that are located too close to one another to generate enough sales, it should focus others around smaller formats and tighter assortments of high-frequency categories such as health, wellness, and beauty.

Pharmacies should also better integrate stores with digital ordering and the fast, convenient fulfillment that consumers desire across retail categories, while using physical locations for services that are difficult to replicate online, such as vaccinations and valued pharmacist consultations.

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