The highest government at Walgreens lamented the lack of gross sales from placing gadgets like toothpaste behind lock and key to crack down on rampant shoplifting that has plagued pharmacy chains across the nation.
“When you lock things up…you don’t sell as many of them. We’ve kind of proven that pretty conclusively,” Tim Wentworth, CEO of Walgreens Boots Alliance, advised traders throughout a latest earnings name.
Wentworth stated that Walgreens noticed a 52% enhance in “shrink” — an trade time period which implies a lack of stock that can not be accounted for by means of gross sales or different official means — after reporting earnings final Friday.
He went on to say that grappling with retail theft was akin to a “hand-to-hand combat battle.”
Walgreens is now exploring artistic options to fight shrink with out compromising the purchasing expertise, although Wentworth was imprecise about specifics.
This strategy goals to stability safety wants with shopper comfort, signaling a shift from previous practices.
Retailers have used varied methods to fight rising shoplifting charges, together with enhanced safety measures like surveillance cameras, good gates and digital tags in addition to locked show circumstances for steadily stolen gadgets.
Firms have additionally undertaken worker coaching, put into use body-worn cameras and have engaged in nearer collaboration with legislation enforcement.
Whereas these measures intention to cut back losses and enhance security, they often result in buyer dissatisfaction, underscoring the problem of balancing safety with a constructive purchasing expertise.
Walgreens Boots Alliance exceeded expectations in its first-quarter fiscal 2025 outcomes, posting adjusted earnings per share of 51 cents in comparison with analysts’ projections of 37 cents, alongside a 7.5% rise in gross sales to $39.5 billion.
The higher-than-expected earnings have been attributed to strikes by Wentworth and his administration group, together with plans to shutter roughly 1,200 underperforming US shops over three years and implement a $1 billion cost-reduction initiative to spice up profitability and money circulation.
The constructive outcomes sparked a big enhance within the firm’s inventory value, signaling investor confidence within the ongoing restructuring efforts.
Since Jan. 1, the inventory value has risen by greater than 32%. WBA’s share value is down by greater than 77% within the final 5 years as customers have made the transition to e-commerce.
