Another American business is closing doors and boarding up windows in hopes of riding out Hurricane Bidenomics.
In a news release Thursday, Walgreens Boots Alliance, Inc. (WBA), which owns the Walgreens retail pharmacy chain, announced a “significant multiyear footprint optimization program to close certain underperforming U.S. stores.”
The announcement cited both “a challenging U.S. retail environment” and “a worse-than-expected U.S. consumer environment.”
WBA investors received details on a Thursday morning Q3 2024 earnings call featuring CEO Tim Wentworth.
According to a transcript of the earnings call, Wentworth described 25 percent of Walgreens stores as adding nothing at present to the company’s Adjusted Operating Income, or AOI.
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“Currently, 75 percent of our U.S. stores contribute roughly 100 percent of segment AOI. For the remaining 25 percent of the stores in our network, which are not currently contributing to our long-term strategy, changes are imminent,” the CEO said.
Wentworth did not specify the precise number of stores slated for closure.
Walgreens, however, boasts more than 12,500 stores across the U.S., Europe and Latin America. The 50 U.S. states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands account for nearly 9,000 of these stores.
Thus, as many as 2,250 “underperforming” U.S. stores could close as part of the company’s “multiyear footprint optimization program.”
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As one might expect, the announcement of store closures also came with diminished expectations for full-year earnings. Wentworth attributed this to the economy as a whole.
“In U.S. Retail Pharmacy, we witnessed continued pressure on the U.S. consumer,” the CEO noted. “Our customers have become increasingly selective and price sensitive in their purchases.”
In other words, Biden’s signature inflation has made consumers cautious.
Meanwhile, WBA Global Chief Financial Officer Manmohan Mahajan amplified Wentworth’s comments about the general economic environment.
“As Tim mentioned, the consumer backdrop remains a challenge. With this continued channel shift and a sustained pullback in discretionary spending, we have responded by lowering prices across health and wellness, personal care and seasonal categories,” Mahajan said.
Other industries, of course, have responded similarly to this “sustained pullback in discretionary spending” by consumers.
In the fast-food sector, for instance, Biden’s inflation has resulted in “value meal wars.” And one could hardly imagine a more depressing signal. After all, if consumers cannot afford the price of fast food, then what can they afford?
Nonetheless, prominent Democrats have continued to lie about Bidenomics.
Following the president’s catastrophic debate performance on Thursday night, for instance, Democratic Gov. Gavin Newsom of California cited phony economic numbers while encouraging an MSNBC audience to rally around Biden’s “masterclass” of a presidency.
No word on whether Newsom credited Biden’s “masterclass” with triggering that “sustained pullback” in Americans’ “discretionary spending.”
Here’s hoping Walgreens workers can weather the storm.
