In the wake of a disappointing quarter, Walgreens’ stock reached a new 52-week low on Thursday, plummeting 22% as the company’s earnings fell short of Wall Street’s expectations. CEO Tim Wentworth attributed the poor performance to “difficult marketplace dynamics” and “persistent pressures on the U.S. consumer.”
Walgreens is struggling to compete with Amazon, which offers more convenience and competitive pricing. Analysts like CNBC’s Jim Cramer have noted that Walgreens is more expensive than Amazon and lacks the convenience of the e-commerce giant. He highlighted issues with employee availability, theft problems, and items locked behind plexiglass in Walgreens stores. While Walgreens’ pharmacy business currently has an edge over Amazon, Cramer mentioned the challenges of finding pharmacists and Amazon’s own growing pharmacy segment.
Comparing Walgreens to the now-defunct bookstore chain Borders, Cramer expressed concerns about Walgreens’ future if it doesn’t adapt to the changing landscape. He emphasized Amazon’s focus on providing the best products at the most convenient locations, which increasingly means consumers’ homes. Cramer raised questions about Walgreens’ long-term viability in a market dominated by online competitors like Amazon.
Walgreens and Amazon did not provide immediate comments on the situation. Cramer’s analysis highlights the challenges facing traditional retailers like Walgreens in an increasingly digital and consumer-focused marketplace.