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Walgreens Shuttering E-Commerce Distribution Facility in Illinois

Move follows corporate layoffs and lower-than-expected Q3 earnings
Emily Crowe, Progressive Grocer
Walgreens is shuttering its e-commerce shipping facility in the southern Illinois city of Edwardsville.

Following news of both corporate layoffs and the impending closure of 150 of its stores, Walgreens Boots Alliance, Inc. has announced that its e-commerce shipping center in Edwardsville, Ill., will close later this summer. About 400 layoffs will take place as a result of the facility’s closure.

Walgreens spokesperson Marty Maloney told the Chicago Sun-Times that the company will continue to operate 16 other distribution centers, and local stores will take on the job of fulfilling customer orders. Affected workers are expected to receive 60-day notices by mid-July.

“We are grateful for the many contributions our team members at this facility have made and we are committed to supporting them during this transition,” Maloney said.

On June 27, Walgreens shared lower-than-expected Q3 earnings, with a dip in profitability and market conditions that led to a slowdown in demand for certain products and services. Net earnings reached $118 million in the three-month period, compared to $289 million during the third quarter of fiscal 2022, while earnings per share (EPS) fell to $0.14 from $0.33 the prior year. Sales went up by 8.6% during the quarter, topping $35.4 billion.

CEO Rosalind Brewer said that the overall sales growth was noteworthy, but underscored the challenging operating environment. “Consumers continue to appreciate the value, convenience, and range of services provided by Walgreens and Boots. However, significantly lower demand for COVID-related services, a more cautious and value-driven consumer, and a recently weaker respiratory season created margin pressures in the quarter,” she remarked.

During the Q3 earnings call, CFO James Kehoe shared that the company plans to close 150 U.S. locations and an additional 300 stores in the U.K. as part of its cost-cutting plans. The announcement of the store closings comes on the heels of a round of layoffs at the company's corporate offices, announced in May.

Those layoffs include 504 employees, or about 10% of the company’s corporate workforce. Walgreens also plans to reduce capital and project spending, simplify its portfolio to pay down debt and fund strategic initiatives and boost synergies between the company’s U.S. health care and Walgreens operations.

Deerfield, Ill.-based Walgreens, which operates nearly 9,000 retail locations across the United States, Puerto Rico and the U.S. Virgin Islands, is No. 5 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.

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