Kleenex, Aisle 6... Walgreens lost $1.7B last quarter — for reference: it made a $1B profit during the same quarter last year. Foot traffic fell because of stay-at-home orders and those who came in were buying less-profitable items (like TP instead of beauty products). So to save cash, Walgreens is cutting 4K jobs in the UK and the stock still fell 8%.
Skipping 10 years of med school... Despite the loss, Walgreens will invest a whopping $1B over 3 years to open up 700 doctors' offices. It's invested in primary-care provider VillageMD to bring sleek, zen-themed clinics into your Walgreens locations (half in medically underserved areas). Walgreens is splurging for the "short-term pain, long-term gain" strategy:
Healthcare is big retailers' Big Bet... for big profits. CVS acquired Aetna insurance in 2018 and is planning 1.5K "HealthHUB" clinics by 2021 (no doctors though). Walmart is doing something similar with its flat-fee primary care clinics (and it just launched a health insurance biz this week). All these retailers already have big physical footprints, and they figure adding healthcare into one-stop-shopping could drive growth.