Walgreens says it turns out locking up stuff is bad for business
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Walgreens has finally figured out what most people already knew: When you lock up all the products, people will buy fewer things.
CEO Tim Wentworth acknowledged this reality in a first-quarter earnings call on Jan. 10. He said the company’s decision to lock up products after reporting a 52% increase in stolen inventory had backfired.
“When you lock things up, for example, you don’t sell as many of them. We’ve kind of proven that pretty conclusively,” he said.
Wentworth said he is working with the company’s head of asset protection to develop “creative” solutions to combat shoplifting.
“I don’t have anything magnificent to share with you today. It is a hand-to-hand combat battle still, unfortunately.”
Walgreens (WBA+1.68%), which has been struggling financially, reported an operating loss of $245 million for the quarter, compared to $39 million in the same quarter the previous year.
The chain plans to close hundreds of underperforming stores this year in an effort to turn business around and be more efficient. Despite a decrease in retail sales, the company did report growth in pharmacy sales.
