I think this story is far more complex than the two opposing narratives.
Indeed Walgreens and CVS did over extend themselves with their retail stores and closures were planned.
Theft was not the only reason Walgreens closed stores, but is certainly a contributing factor.
Obviously any retailer is going to close stores that are not profitable- or if they’re forced to close stores they will likely close those that are less profitable.
In CA you have a confluence of issues- 1) #1 Walgreens had too many stores and has not been doing well financially- they do not have the integrated monopoly CVS has (CVS stores, Caremark PBM + mail order pharmacy, Aetna insurance- all under one roof given them massive negotiating power)
2) Retail theft is at an all time high and this undoubtedly cuts into profits. Walmart has brought its concerns over a year ago and is now closing stores citing theft. Walmart as a whole has been doing better than ever from the pandemic.There is a reason why the last CVS I went into in downtown Boston had ice cream behind a locked door and Target has socks and underwear in locked cases. And some stores, including Walgreens are investing in building stores with basically having all their product behind a counter.
3) Safety- Stores and Pharmacies especially do not want to operate in high crime areas. SF has a lot of crime lately. Pharmacy robberies are up- for example 620% in NY. Pharmacists do not want to work in areas that are unsafe
4) Employment- CVS and WAG have treated their employees, pharmacy staff in particular, like trash despite paying well. That’s finally come to a head with pharmacist strikes and many leaving their job. Pharmacy hours have been cut dramatically. You may notice pharmacists now get lunch breaks. I was in a CT CVS that’s pharmacy was now closed on Sunday. You may also notice things are much slower. There is a huge pharmacist shortage at the moment and pharmacies are struggling with staffing. There’s a huge turnover of pharmacy technicians and maintaining competent techs is always a problem. And they’re definitely going to have trouble staffing stores in areas with high crime. I’ve known pharmacists paid more to work in dangerous areas- effectively hazard pay.
5) Insurance reimbursement- Rx. reimbursement rates continue to be whittled away by the PBMs. This is compounded in Low-income areas where most patients are on Medicaid. Some medications will actually lose the pharmacy money. Private insurance reimbursement is bad enough, but Medicaid pays pennies on the dollar. Meanwhile PBMs have been found to pocket 6x what the pharmacy makes. You can’t survive as a pharmacy on Medicaid reimbursement alone.
6) Costs, Taxes, Laws- SF especially, is notoriously expensive. High rent, high taxes. CA is also not exactly the friendliest state towards businesses. Insurance costs more in higher crime areas. And if you don’t have laws to prosecute those that steal from you… that’s a problem.
I suspect for Walgreens the theft issue had pushed things over the edge.
Boston has had problems with pharmacies closing in low income areas resulting in “pharmacy deserts”. Activists of course have claimed “racism”. It’s not, it’s business. These companies have repeatedly demonstrated they will put finances above providing healthcare at every turn. But this exactly is what happens when the government allows two companies to destroy the independent pharmacy market.
