To combat theft, Walgreens has increased the number of items displayed in locked cases. However, they report a decrease in sales as a result.

According to McKinsey & Company, an increase in security measures typically leads to lower sales figures. Walgreens has experienced this phenomenon directly.

During a call with investment analysts on January 10, Walgreens Boots Alliance Inc. CEO Timothy Wentworth explained that placing more items in locked displays “does affect how sales operate in the store since locking items up means you don’t sell as many.” He stated that this has been clearly demonstrated.

Addressing theft, Wentworth mentioned that Walgreens’ asset protection team is exploring “innovative solutions” to enhance the “customer experience related to shrinkage,” although he did not provide specific details at this time.

When asked by YSL News, Walgreens did not share specific examples of which products are being placed in display cases.

Sales Growth Driven by Pharmacy

In its latest financial report, Walgreens announced a 7.5% increase in sales to $39.5 billion for the first quarter of fiscal 2025, which ended on November 30, 2024.

This increase was primarily driven by a 12.7% rise in comparable pharmacy sales, attributed to higher prices on branded medications and an uptick in filled prescriptions, according to the company.

Conversely, comparable retail sales saw a decrease of 4.6%, mainly due to lower sales in discretionary categories and a less active cold and flu season, Walgreens reported.

Walgreens to Close More Stores

As part of its restructuring efforts, Walgreens plans to shut down approximately 1,200 stores, with about 500 scheduled for closure in fiscal year 2025, which ends in August 2025, as announced in October.

The company closed 70 stores in the first quarter of fiscal 2025, which ended November 30, 2024, according to Wentworth during the recent call. Additionally, Walgreens anticipates closing about another 450 stores by the end of 2025.

Shrinkage and Crime as Major Issues

“Shrink,” a term used in retail to refer to lost inventory from various causes, including theft, resulted in $112 billion in retail losses in 2022, up from $94 billion the previous year, as reported by the National Retail Federation.

The issue of shoplifting is escalating. A report released in December 2024 by the NRF highlighted a 90% increase in dollar losses due to shoplifting in 2023 compared to 2019, with the average number of incidents rising by 93% during the same period.

In addition to shoplifting, there is an increased threat of organized retail crime, leading to elaborate criminal operations worth millions. “Retail crime presents one of the primary challenges our industry faces today,” stated Walgreens media relations director Marty Maloney to YSL News.

“To ensure the best experience for our patients and customers and to protect our staff and clientele, we implement preventative measures against theft. Installing anti-theft devices is among these actions, aimed at discouraging theft and enhancing security in our stores,” he added. “These measures are taken in response to theft statistics alone, and they help us maintain product availability for our customers.”

Walgreens is no stranger to issues of theft. In 2022, the company’s former global chief financial officer, James Kehoe, reported a 52% surge in shrink during 2020 and 2021. However, by 2022, the shrink rate had decreased to 2.5% to 2.6% of sales, down from 3.5% in 2021.

This story has been updated to reflect new information.

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