Walgreens has lost its way for many years now. Basically ever since becoming involved with "Boots." That was such a huge mistake for what was previously a debt free and very stable company.
The abrupt exit of the CEO without an announced replacement is curious. Now we have both Rite Aid and Walgreens without a steady CEO in place.
It looks to me like the pharmacy business in general is rapidly deteriorating. CVS seems to be making it work, I guess CVS will end up as the de facto government backed due to having so many government contracts/"too big to fail" pharmacy chain and all these other chains will just fade off over time.
Even if these chains had kept a solid high volume front end business running (which they have not) that could have in theory mitigated the losses from pharmacy, I don't think even the busiest front ends could cover for these opioid lawsuits and the ongoing losses from various insurance fills not covering wholesale drug cost.
Walgreens CEO steps down
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storewanderer
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Re: Walgreens CEO steps down
No sympathy from me.
They deserve to fail and more.
Too bad the customers and employees will feel the most pain
They deserve to fail and more.
Too bad the customers and employees will feel the most pain
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ClownLoach
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Re: Walgreens CEO steps down
At first I was surprised that Brewer failed so quickly, but then I reconsidered her track record and recognized a trail of mediocre performance.
Starbucks was a mess of unionization efforts and stores that lost their soul under her leadership as she pushed for conversions to drive throughs and computerized staffing models that slashed payroll to nil.
Sam's Club was a failing "bulk Walmart" closing stores left and right until she left, then they began what will undoubtedly go down as the best retail turnaround story of the decade with their new focus of simplicity through employee empowerment, better merchandise quality, and technology assisted shopping experience.
And now instead of fixing the broken Walgreens stores, she tried to transform the organization into a healthcare company, leaving the stores flailing in the wind as their conditions detriorate into irrelevance in the marketplace. Now Walgreens has forgotten who they are and given the industry crown to the evil empire of CVS who has demonstrated that they can indeed be a drugstore, a pharmacy both retail and direct order, a health care clinic company, a health insurer, and a prescription insurance company. The difference is that CVS' leadership can multitask, with the CEO managing leaders for each unit of the business, while Brewer tried to run everything herself. Hey, at least she figured out how to get giant TV screens to replace the freezer doors which delivered.... I'm not really sure what.
If it wasn't for the fact that obviously these pharmacy chains are in real, serious trouble with these opioid lawsuits, rampant theft, unreasonable prices that customers find repulsive, and unprofitable insurance reimbursements, I'd say this would be a great opportunity for someone to come in and buy Walgreen US to unravel the failed Boots merger alongside another attempt to merge with the soon-to-be-bankrupt Rite Aid and try to combine the two parts. Unfortunately with the problems of both chains I feel that now such a deal would have all the pizzazz of the Sears-Kmart merger and we all know how well that worked out.
The drugstore industry clearly needs a visionary, someone who can help these stores find meaning in their communities once again. Unfortuately they collectively gave away their relevance in front-end store businesses over the last 30 years, ceding the business to Walmart and Target. Once they reached the point of becoming stagnant (which is all of these chains today including CVS) then the front end moved from being a traffic driver and volume builder into something more of just "being there to fill the space" and hopefully work as the reverse of the "milk on the back wall" model as customers might make a convenience buy on their way out from a prescription pickup. But does any drugstore attract customers who are coming in not for pharmacy, but for the assortment within the front end anymore at all? The only time I see this is when a customer discovers they need something arcane and specific that Walmart or Target don't carry, so then they come in searching for that one specific oddball SKU, buy it and leave, never to return unless they need some kind of OTC pills or healthcare item at 2am and the drugstore was the only place open in town.
I think Walgreen is right on time with this decision. Their earnings have begun a steep decline, to the point of nearly losing money which means its officially crisis time at the office. At the same time they've managed to extinguish long term debt for the last 3+ years so their long term financial health is improving. If they can find the visionary I describe who can fix their stagnant, stale, and unpleasant stores without spending billions of dollars doing so then maybe they can take a role in steering this segment of the retail industry back to relevance. But they are also on the precipice of falling into an irreversible collapse as insurers like BCBS start to move away from these operationally challenged drugstores and look to push the collective public kicking-and-screaming into mandatory mail order pharmacy (like BCBS and their Amazon deal.).
Walgreens has a hell of a decision to make with their next CEO. I believe even as large as this company is with 8700 locations, they have to get this right. Otherwise the wrong CEO will become their final CEO.
Starbucks was a mess of unionization efforts and stores that lost their soul under her leadership as she pushed for conversions to drive throughs and computerized staffing models that slashed payroll to nil.
Sam's Club was a failing "bulk Walmart" closing stores left and right until she left, then they began what will undoubtedly go down as the best retail turnaround story of the decade with their new focus of simplicity through employee empowerment, better merchandise quality, and technology assisted shopping experience.
And now instead of fixing the broken Walgreens stores, she tried to transform the organization into a healthcare company, leaving the stores flailing in the wind as their conditions detriorate into irrelevance in the marketplace. Now Walgreens has forgotten who they are and given the industry crown to the evil empire of CVS who has demonstrated that they can indeed be a drugstore, a pharmacy both retail and direct order, a health care clinic company, a health insurer, and a prescription insurance company. The difference is that CVS' leadership can multitask, with the CEO managing leaders for each unit of the business, while Brewer tried to run everything herself. Hey, at least she figured out how to get giant TV screens to replace the freezer doors which delivered.... I'm not really sure what.
If it wasn't for the fact that obviously these pharmacy chains are in real, serious trouble with these opioid lawsuits, rampant theft, unreasonable prices that customers find repulsive, and unprofitable insurance reimbursements, I'd say this would be a great opportunity for someone to come in and buy Walgreen US to unravel the failed Boots merger alongside another attempt to merge with the soon-to-be-bankrupt Rite Aid and try to combine the two parts. Unfortunately with the problems of both chains I feel that now such a deal would have all the pizzazz of the Sears-Kmart merger and we all know how well that worked out.
The drugstore industry clearly needs a visionary, someone who can help these stores find meaning in their communities once again. Unfortuately they collectively gave away their relevance in front-end store businesses over the last 30 years, ceding the business to Walmart and Target. Once they reached the point of becoming stagnant (which is all of these chains today including CVS) then the front end moved from being a traffic driver and volume builder into something more of just "being there to fill the space" and hopefully work as the reverse of the "milk on the back wall" model as customers might make a convenience buy on their way out from a prescription pickup. But does any drugstore attract customers who are coming in not for pharmacy, but for the assortment within the front end anymore at all? The only time I see this is when a customer discovers they need something arcane and specific that Walmart or Target don't carry, so then they come in searching for that one specific oddball SKU, buy it and leave, never to return unless they need some kind of OTC pills or healthcare item at 2am and the drugstore was the only place open in town.
I think Walgreen is right on time with this decision. Their earnings have begun a steep decline, to the point of nearly losing money which means its officially crisis time at the office. At the same time they've managed to extinguish long term debt for the last 3+ years so their long term financial health is improving. If they can find the visionary I describe who can fix their stagnant, stale, and unpleasant stores without spending billions of dollars doing so then maybe they can take a role in steering this segment of the retail industry back to relevance. But they are also on the precipice of falling into an irreversible collapse as insurers like BCBS start to move away from these operationally challenged drugstores and look to push the collective public kicking-and-screaming into mandatory mail order pharmacy (like BCBS and their Amazon deal.).
Walgreens has a hell of a decision to make with their next CEO. I believe even as large as this company is with 8700 locations, they have to get this right. Otherwise the wrong CEO will become their final CEO.
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storewanderer
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Re: Walgreens CEO steps down
My guess is Walgreens now former CEO was tasked by the Board of Directors to expand the company's healthcare business. However the initiatives didn't really gain much traction like Village Healthcare, doing store downsizing and converting a big chunk of the space into medical, etc. Then when COVID hit everything got messed up. Too many resources were put into the pop up COVID vaccine program which was not a long term product/service line and I don't think there is one retailer who made any "new customers for life" out of the pop up COVID vaccine program. But to execute that was enough of a distraction to take away from any efforts to build further the healthcare business.
Unlike CVS who still had Minute Clinic going and during the height of COVID they separated out the COVID vaccine/COVID testing service lines from Minute Clinic and set up temporary facilities for those products/services. I think some of them may have been run by Minute Clinic people but from what I heard a lot of the employees running those services at CVS were tasked specifically with that service (then moved to other open positions at CVS once those services were transferred to Minute Clinic which didn't happen until well into 2022). I can say what I want about my dislike for CVS but being as objective as possible there are a lot of things they really do seem to handle well.
As far as Walgreens goes they've been in major expense cut mode since before this CEO was put into place. In my view nothing really got worse or better with this CEO. They just sort of tread water. They did relaunch their loyalty program and update the logo but neither of those mattered to customers. I also think the Rite Aid acquisition was a mistake for Walgreens.
Unlike CVS who still had Minute Clinic going and during the height of COVID they separated out the COVID vaccine/COVID testing service lines from Minute Clinic and set up temporary facilities for those products/services. I think some of them may have been run by Minute Clinic people but from what I heard a lot of the employees running those services at CVS were tasked specifically with that service (then moved to other open positions at CVS once those services were transferred to Minute Clinic which didn't happen until well into 2022). I can say what I want about my dislike for CVS but being as objective as possible there are a lot of things they really do seem to handle well.
As far as Walgreens goes they've been in major expense cut mode since before this CEO was put into place. In my view nothing really got worse or better with this CEO. They just sort of tread water. They did relaunch their loyalty program and update the logo but neither of those mattered to customers. I also think the Rite Aid acquisition was a mistake for Walgreens.