Walgreens is in trouble. And that means trouble for Chicago.
The Deerfield-based pharmacy giant, having lost about three-quarters of its market value since the beginning of 2022, is embarking on a major turnaround plan, which will entail the closure of hundreds of stores nationwide if not well over 1,000. Fully a quarter of Walgreens’ roughly 8,500 stores in the 50 states, the District of Columbia and U.S. territories are unprofitable, the company shockingly disclosed last week. Walgreens plans to shutter a healthy portion of those, although the precise number is to be determined.
This is potentially terrible news for Chicago, and not just because Walgreens is the region’s largest locally based public corporation. Chicago has by far the most Walgreen stores of any city in the nation, with 111 of them. Houston is next on the list with 98.
More importantly for Chicago, Walgreens is one of the only major retail outlets left in a large number of low-income neighborhoods that have watched other retail chains flee. If Walgreens were to exit those communities, the blow would be tremendous. In neighborhoods like Englewood on the South Side and North Lawndale on the West Side, Walgreens is a critical anchor and typically the only retailer of its kind. It functions often as an important source of groceries (including fresh food like milk and cheese) in addition to the prescription and over-the-counter medications it dispenses.
But the drugstore chain is in something approaching crisis. Earnings are falling, the company’s past efforts at diversifying its profit sources have faltered and CEO Tim Wentworth, hired last year to fix the business, has determined that a back-to-basics approach is needed. He also has decided that Walgreens has far too many stores. His difficult decision to close a healthy chunk of the many laggards is perfectly rational.
Still, Wentworth understands Walgreens’ role in many struggling urban neighborhoods. “The fact of the matter is we know that we are the last company standing in a lot of places. We are the only thing standing between those places and being pharmacy deserts, and our goal is not simply to be the last one to leave,” he told analysts last week in outlining his plan.
But, he said, continuing to serve those neighborhoods isn’t just up to Walgreens. A major problem for urban stores, particularly in lower-income areas, is what retailers euphemistically call “shrink.” That’s a polite term for theft, and it’s become rampant, driving other big-box retailers like Walmart and Target out of Chicago neighborhoods like Chatham on the South Side.
Walk into any South Side Walgreens (or CVS for that matter) and most every item other than foodstuffs is under lock and key. Need toothpaste? A bar of soap? Push a call button and wait anywhere from a few minutes to 10 or even 15 for a worker to come over with the keys. South and West Siders have grown used to the inconvenience, but it’s dispiriting nonetheless — a regular reminder of the deterioration of their neighborhoods.
We’ve seen progressive politicians such as Cook County State’s Attorney Kim Foxx declare they will not prosecute thefts from Walgreens and similar stores as felonies unless the perpetrators steal more than $1,000 in goods. The surging crime has helped drive other retailers from the South Side. Walgreens is putting Chicago politicians on notice.
Wentworth didn’t call out Chicago Mayor Brandon Johnson — or any other big-city mayor — by name, but he didn’t have to. “Our goal is to actually find new ways to work together, whether it’s with state Medicaid programs, whether it’s with local law enforcement, and so forth, for them to do their jobs so that we can do our jobs and continue to provide care in those communities,” he said.
And if the powers that be don’t do their jobs? Wentworth left that question dangling, but it’s not difficult to imagine what the answer would be if he were pressed.
The alarm bells are ringing more loudly all the time on the South and West sides. Walmart last year closed its Chatham supercenter and smaller outlets in Kenwood and Little Village. Target shuttered its Chatham store in 2018 along with a Morgan Park outlet.
And just over the weekend came a grim surprise: the Showplace Icon movie theater in the South Loop closed its doors after screenings on Sunday, Block Club reported. The shuttering, which came with almost no warning, turns out the lights on one of the South Side’s last remaining places to see first-run movies. Open only 15 years, the South Loop cineplex’s demise follows the closure earlier this year of the 14-screen Cinema Chatham theater, which struck yet another blow at that struggling community. About all that’s left for filmgoers on the South Side — apart from the Ford City movie theater, which can be more accurately described as Southwest Side — is the four-screen Harper Theater in Hyde Park.
That’s symbolically apt because increasingly Hyde Park, anchored by the University of Chicago, is the only South Side neighborhood showing any retail vibrancy.
Crime isn’t the only factor precipitating these closures, of course. For one other thing, the parent company behind the Redbox DVD rentals kiosk filed for bankruptcy Friday and named Walgreens as one its larger creditors. But that’s not in control of local politicians. Crime is a different matter.
By voting with their feet, Target and Walmart sent a clear message to those charged with maintaining law and order in Chicago: Conditions aren’t tolerable, they said, in effect. They also don’t seem to think Chicago can get a handle on the problem in any sort of reasonable timeframe.
Now Walgreens, which has a storied Chicago history and far deeper ties to the region than Target and Walmart, has issued its own warning. If there isn’t significant progress made on public safety, Chicago surely won’t be spared its share of’ mass shutterings Walgreens says are necessary to right the ship.
Then it won’t be just a fun night at the movies South and West siders will have to travel far to enjoy. It will be to refill their prescriptions, too — and, in some cases, to feed their families.
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