Industry Pressures Result in More Job Cuts, Store Closures

October 30, 2019

Walgreens and a California chain announced closures this week.

In more bad news for retail pharmacy, Walgreens cut corporate staff and Sacramento-based Raley’s is closing pharmacies in 27 of its stores.

Walgreens did not disclose the number of corporate jobs cut-or which positions were impacted, Crain’s Chicago Business reports. The cuts are part of the drug store chain’s plan to reduce costs by $1.8 billion per year by 2022. 

Walgreens is also shutting down 150 in-store clinics, but is partnering with Jenny Craig to offer health and weight loss management services in 100 stores starting in January.

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Walgreens’ and Raley’s cutbacks are an unfortunate sign of the times for retail pharmacy. This summer, Walmart announced it was eliminating 3% of its pharmacy positions nationwide. Soon after, Walgreens said it was closing 200 underperforming stores across the U.S., while CVS said it was closing 46 stores and significantly cutting back the number of new stores it planned to open.

“There are many challenges in the pharmacy space today, including industry consolidation, low reimbursement rates, and high operating costs,” Chelsea Minor, corporate director of consumer & public affairs for Raley’s, tells Drug Topics. “We chose to close our pharmacies where profitability was low and alternative options were nearby to make the transition as seamless as possible for impacted patients.”

While Raley’s will still operate 69 pharmacies, it is transferring prescriptions from 27 Raley’s, Bel Air, and Nob Hill pharmacies to a combination of Walgreens, CVS Pharmacy, and Rite Aid locations. 

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Around 100 team members will be impacted by the closures, Minor says. “Our hope is that 50% take on new roles within Raley’s. For those who leave our organization, we are offering pay and benefits during a transition period as well as future employment assistance. We also are working with the three other companies to potential support future employment.”

In wake of the closures, Raley’s is focusing more on grocery offerings at its stores. “Tough decisions like this enable us to continue to make bold moves to make healthier food more available to everyone and to revolutionize the way people shop for groceries,” Minor says.

 

The retailer has a “comprehensive plan from marketing to operations to enhance service and offerings at our stores,” Minor adds.