Walgreens, the second-largest pharmacy store chain, is slated to shutter nearly 40 percent of the clinics in its stores as the drugstore chain cuts costs and shifts to other businesses it believes will draw more people through its doors.
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On Monday, the company said that it will close 150 Walgreens-run clinics by the end of the year, but it will keep open more than 200 that are run in partnership with health care providers.
As clinics close, the company will be opening up 100 locations for the weight-loss company Jenny Craig at stores nationwide, starting January.
The Jenny Craig at Walgreens locations will offer customers personalized health and weight loss management services.
In its latest addition to their affordable health care services available at select Walgreens, customers may receive private one-on-one consultations, a customized menu plan and meal delivery.
“We found Jenny Craig to be a strong fit with our shared mission to provide trusted, proven, and personalized care,” said Jim OConor, senior vice president, neighborhood health destination, Walgreens. “Jenny Craig at Walgreens will give customers the opportunity to interact face-to-face with Jenny Craig consultants, just as our patients have experienced for over a century with our pharmacists.”
Drugstore chains like Walgreens started years ago adding small clinics that dole out flu shots and handle relatively minor health issues like sinus infections. But analysts say the chains have struggled to make money off the clinics, which face growing competition from telemedicine services that allow customers to get care through their smartphones.
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Walgreens runs more than 18,750 stores internationally. That includes 9,277 in the United States, Puerto Rico and the U.S. Virgin Islands.
It has been trimming its total as part of a plan to cut costs. In August the company announced it planned to shutter 200 stores nationwide, according to a Securities and Exchange Commission filing.
Walgreens has been hit by challenges including reimbursement cuts and lower price increases for branded drugs.
Drugstores also face competition in areas outside their pharmacies from online options like Amazon.com.
Walgreens said Monday that it has raised its annual savings target from its cost-cutting program to $1.8 billion by fiscal 2022, up from a previous goal to exceed $1.5 billion.
In the final quarter of fiscal 2019, Walgreens earnings tumbled 55% to $677 million, due in part to charges from its cost-cutting program. Adjusted results totaled $1.43 per share. Revenue climbed 1.5% to $33.95 billion.
The results surpassed Wall Street expectations. Analysts expected, on average, earnings of $1.41 per share on $33.86 billion in revenue, according to Zacks Investment Research.
The Jenny Craig locations will open in 20 states across the country in markets including Dallas, Houston, Philadelphia, and Phoenix, among others.
The Associated Press contributed to this report.