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Walgreens CEO Timothy Wentworth revealed that locking up products to prevent theft resulted in decreased sales. During a recent earnings call, Wentworth explained that locking items like toothpaste led to fewer sales, proving the strategy's ineffectiveness. Walgreens experienced a 52% increase in "shrink," a term for lost inventory, after implementing these measures.
"When you lock things up… you don’t sell as many of them. We’ve kind of proven that pretty conclusively," Wentworth said.
The company is now exploring alternative solutions to combat theft while maintaining a positive shopping experience. Although specifics were not provided, the approach aims to balance security needs with consumer convenience. Retailers, including Walgreens, have used various strategies to address rising shoplifting rates, such as surveillance cameras, smart gates, and electronic tags. However, these measures can lead to customer dissatisfaction.
Despite these challenges, Walgreens reported a 7.5% increase in sales, reaching $39.5 billion in the first quarter of fiscal 2025, driven by higher pharmacy sales. The company plans to close approximately 1,200 underperforming stores and implement a $1 billion cost-reduction initiative. These efforts have boosted investor confidence, with Walgreens' stock price rising over 32% since January 1.