Consumer spending: The undisclosed financial mechanism behind American Christmas expenses
Walgreens is set to implement a significant restructuring strategy, including the closure of approximately 1,200 stores. Of these, around 500 are slated to shut down within the company’s fiscal year 2025, concluding in August 2025, as stated by Walgreens in October.
During a recent conference call, Walgreens revealed the closure of 70 stores in the initial quarter of fiscal 2025, which ended on November 30, 2024. The company plans to further close about 450 stores by the conclusion of 2025.
Retail shrinkage and criminal activities are currently among the primary adversities faced by the industry. “Shrink,” a term within the retail sector denoting inventory loss, including theft, led to a staggering $112 billion in retail losses in 2022, up from $94 billion in the previous year, as reported by the National Retail Federation.
Incidents of shoplifting show no signs of abating, with retailers noting a 90% surge in monetary losses attributed to shoplifting in 2023 compared to 2019, as per a more recent NRF report released in December 2024. The average number of shoplifting occurrences escalated by 93% during this period, according to the trade group.
In addition to traditional shoplifting, there is a growing concern surrounding organized retail crime, which can manifest as sophisticated multimillion-dollar operations. Marty Maloney, Walgreens’ media relations director, emphasized the severity of retail crime, stating, “Retail crime is one of the prominent challenges currently faced by our industry.”
To safeguard the interests of patients, customers, and staff, Walgreens has adopted various preventative measures to combat theft. Measures such as the installation of anti-theft devices aim to deter theft and enhance the safety and security of the stores. These security enhancements are a direct response to theft data, enhancing product availability for customers.
Instances of shoplifting and shrinkage are not novel to Walgreens. In 2022, the company’s then-global chief financial officer, James Kehoe, disclosed a concerning 52% rise in shrinkage during 2020 and 2021. However, by 2022, shrinkage had decreased to 2.5%-2.6% of sales from 3.5% in 2021.
For further updates on this developing story, follow Mike Snider on Threads, Bluesky, and X: mikegsnider & @mikegsnider.bsky.social & @mikesnider.
Stay informed with our trending newsletter, delivering the latest news highlights of the day.
This piece was originally published on USA TODAY: Walgreens CEO acknowledges impact of security measures on retail sales.
