Walgreens Struggles with Sales as Locked Products Deterrent Affects Shopping Experience

According to Walgreens, locking up goods in retail establishments can deter shoplifters but may also deter paying customers from making purchases. CEO Tim Wentworth discussed the effect of this approach on sales during Tuesday’s Walgreens Boots Alliance first-quarter earnings call.

“You don’t sell as many things when you lock them up,” he said. We have demonstrated that rather definitively. This acknowledgement demonstrates the difficulties merchants encounter in trying to strike a compromise between security protocols and consumer ease and satisfaction.

A larger initiative to prevent retail theft, which has been a significant problem for Walgreens and other businesses, includes the decision to secure merchandise by putting them behind sealed plastic containers.

The goal of this strategy is to address “retail shrink,” which is the phrase used to characterize inventory loss brought on by causes other than sales. Theft, damage, and mistakes in inventory control are all examples of shrink.

Wentworth pointed out that Walgreens has taken more robust steps to safeguard its inventory as a result of retail theft becoming a more substantial factor in the company’s shrink rate.

Locking up goods has had unexpected repercussions, even if it might help discourage theft. Because they have to wait for a store employee to get the merchandise, customers who want to buy frequently find the process annoying.

Customers may become dissatisfied and possibly decide not to make any purchases as a result of this hassle. Walgreens has reexamined its strategy after Wentworth admitted that it hasn’t been successful in sustaining sales levels.

The asset security section of Walgreens is presently tackling these issues by creating novel and “creative” ways to prevent retail theft without materially affecting customers’ shopping experiences.

The business understands that maintaining a smooth, customer-friendly environment while safeguarding its goods requires a delicate balance.

The company’s most recent earnings report clearly shows the financial impact of these difficulties. Compared to the $39 million operational loss in the same quarter last year, Walgreens reported an operating loss of $245 million for the quarter, a substantial rise.

The company’s attempts to curb retail theft and dwindling sales have become even more urgent as a result of this financial setback.

By the end of 2025, Walgreens intends to eliminate hundreds of shops as part of a larger effort to boost its financial performance. This choice is in line with a pattern in which the business has closed almost 2,000 locations in the last ten years.

Having “a lot of experience with store closures,” Walgreens stressed that it saw this action as essential to streamlining its business processes and turning a profit again.

“I don’t have anything magnificent to share with you today. It is a hand-to-hand combat battle still, unfortunately,” Wentworth said.

Walgreens is negotiating a challenging environment in the face of an increase in retail fraud and financial losses. Product security has reduced theft, but it has also made it more crucial to keep customers’ shopping experiences enjoyable.

The organization is dedicated to discovering solutions that benefit both its customer base and its bottom line, as evidenced by its continuous attempts to develop new strategies.

“Naturally, we expect our future footprint to support stronger performance,” Wentworth stated.