Closures haunt ailing US drugstore chains

Drugstore chains across the United States are closing hundreds of key locations due to slowing sales, fewer prescriptions being filled and rising thefts, leaving some small communities without nearby access to essential medicine.

Rite Aid, one of the country's biggest pharmacy chains with approximately 2,200 stores in 17 states, filed for bankruptcy on Oct 15. It will close 154 stores in more than 10 states, it announced on Wednesday.

The 61-year-old company has nearly $4 billion of debt and pays $200 million in interest a year, according to court documents.

It has also faced stiff competition from rivals CVS Pharmacy, the largest US chain, and Walgreens, which are expanding their healthcare services.

Drugstore closures mark a difficult time in pharmacy retail as prescriptions make the stores most of their money, but drug and prescription prices have been lower in recent years, cutting into profits.

Walgreens said it will shut 150 stores in the US and 300 in Britain this year. It has already reduced store hours and cut corporate jobs in a first round of cuts aimed at reducing $800 million by next year.

Between 2018 and 2020, CVS closed 244 stores. In 2021, the company said it would close 900 stores by 2024.

From 1980 to 2022, the number of independent pharmacies has fallen by nearly 50 percent, according to data from consultancy firm McKinsey & Company.

Amid the COVID-19 pandemic, drugstores were able to rake in cash by supplying vaccines and drugs associated with strengthening the immune system and warding off the virus. But the pandemic also caused foot traffic to drop, as customers stayed at home and did not shop.

After the pandemic, many drugstores have been battling large-scale theft, dubbed "retail shrink" by the industry. Those losses cost retail stores $94.5 billion in 2021, up from $90.8 billion in 2020, according to the National Retail Federation.

Carol Spieckerman, a global retail analyst and president of consultancy firm Spieckerman Retail, told China Daily that retail theft is rife.

Most of the country's largest pharmacies sell health aids and household items like shampoo and toothpaste, putting them in direct competition with Walmart, Target, Dollar Tree and Amazon, which often have lower prices.

Agencies contributed to this story.