The top executive at Walgreens lamented the loss of sales from putting items like toothpaste behind lock and key to crack down on rampant shoplifting that has plagued pharmacy chains around the country.
“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, told investors during a recent earnings call.
He went on to say that grappling with retail theft was akin to a “hand-to-hand combat battle” and called the anti-shoplifting measures adopted by the company “largely ineffective.”
Wentworth said that Walgreens saw a 52% increase in “shrink” — an industry term which means a loss of inventory that cannot be accounted for through sales or other legitimate means — after reporting earnings last Friday.
Walgreens is now exploring creative solutions to combat shrink without compromising the shopping experience, though Wentworth was vague about specifics.
This approach aims to balance security needs with consumer convenience, signaling a shift from past practices.
Retailers have used various strategies to combat rising shoplifting rates, including enhanced security measures like surveillance cameras, smart gates and electronic tags as well as locked display cases for frequently stolen items.
Companies have also undertaken employee training, put into use body-worn cameras and have engaged in closer collaboration with law enforcement.
While these measures aim to reduce losses and improve safety, they sometimes lead to customer dissatisfaction, underscoring the challenge of balancing security with a positive shopping experience.
Walgreens Boots Alliance exceeded expectations in its first-quarter fiscal 2025 results, posting adjusted earnings per share of 51 cents compared to analysts’ projections of 37 cents, alongside a 7.5% rise in sales to $39.5 billion.
The better-than-expected earnings have been attributed to moves by Wentworth and his management team, including plans to shutter approximately 1,200 underperforming US stores over three years and implement a $1 billion cost-reduction initiative to boost profitability and cash flow.
The positive results sparked a significant increase in the company’s stock price, signaling investor confidence in the ongoing restructuring efforts.
Since Jan. 1, the stock price has risen by more than 32%. WBA’s share price is down by more than 77% in the last five years as consumers have made the transition to e-commerce.
