The Real Reason Walgreens Is Closing 12 Stores in San Francisco

If you look inside you can see how empty the shelves are in the Walgreens in San Francisco. Photo by James Conrad

By James Conrad

As of 27 February 2024, Walgreens has shuttered a dozen of its stores across San Francisco. Though several of the stores experienced multiple retail thefts, and in spite of Walgreens’ previous announcement in 2021 that it would close five stores in San Francisco because of an “organized shoplifting ring,” the San Francisco Chronicle found that these stores only saw fewer than two recorded shoplifting incidents a month on average since 2018.

The locations closed are 1201 Taraval Street, 3201 and 1363 Divisadero Street, 825 Market Street, 1750 Noriega Street, 5280 Geary Boulevard, 1524 Polk Street, 1301 Franklin Street, 1189 Potrero Avenue 135 Powell Street, 1630 Ocean Avenue and 5300 3rd Street.

The cessation of operations at these locations will no doubt worsen problems experienced by patients, particularly long waits for prescriptions that sometimes may take days at a time. In the case of patients suffering from cancer and/or HIV, these delays may prove fatal. Furthermore, many insurers won’t allow prescriptions to be picked up at other pharmacies, which compounds that same already serious predicament.

“I really liked going to [the Market Street Walgreens] pharmacy,” remarks SoMa resident Thomas Harper. “It’s frustrating losing one that’s so central to everything. I actually tried moving my medication to the Walgreens immediately north of it [on Powell Street] only to find that that one was shutting down too!

“It’s just frustrating,” Harper continues. “There was never long lines at that one on [Market and] Fourth. It was the one I preferred to go to for everything.”

Meanwhile, because the customers have fewer stores to go to, the pharmacists find themselves overworked and overwhelmed, with some having no choice but to forego meal breaks.

Indeed, one explanation for the stores being closed is that Walgreens has found itself caught up in a sea change in terms of how retail business is done. Even before the pandemic, online shopping was on pace to eclipse the traditional method of shopping in person at brick-and-mortar stores. In 2023, 35% of the global population shopped online weekly. In the United States alone, the number of online shoppers increased by 1.91% from 2022 to 2023. By 2027, ecommerce is expected to make up nearly a quarter of retail sales worldwide, and by 2029, the number of online shoppers in the US is expected to increase by 60 million since 2024.

However, Walgreens also overextended itself through competing for over a decade with rival pharmacy CVS for real estate in the San Francisco Bay Area. As of October 2021, Walgreens had 53 locations in San Francisco whereas CVS had just 22. Without a doubt, this saturation contributed to a decline in revenue for the company, especially during the coronavirus pandemic and the attendant quarantine when people were shopping in person less and less.

A very empty closing Walgreens in San Francisco. Photo by James Conrad.

A statement from Walgreens published in the Chronicle on 9 January 2025 cited staffing and rent costs as the reason for the stores being closed. While it is common knowledge that space in San Francisco is at a premium and as a result, rent is sky-high, the lamentation over staffing costs brings to mind the oft-repeated sworn oath of cheap, tyrannical, exploitative bosses: “Nobody wants to work anymore.”

This is not a groundless suspicion on my part. It always seems the bosses that complain the loudest about nobody wanting to work anymore pay the least. In particular, Walgreens has come under fire for underpaying its employees and since at least 2014 and has settled multiple class action lawsuits for wage theft. In the early autumn of 2023, Walgreens pharmacists in Arizona, Washington, Massachusetts, Oregon and other states walked off the job, citing poor working conditions and low pay.

Canadian academic Laura Penny, in her bestselling book Your Call Is Important To Us: The Truth About Bullshit, draws a direct parallel between low wages and shoddy customer service and satisfaction. “In spite of all these glum stats about poorly paid workers delivering C-level service…free-marketeers insist that this is the system that works, the one thing that satisfies our wants and needs,” she writes.

That certainly tracks in Walgreens’ case, as the American Consumer Satisfaction Index gives Walgreens a 74% rating – a solid C – for the 2023-4 fiscal year. Anecdotally, this makes sense. Often when I have shopped at the 825 Market Street location, I have often found myself waiting to check out or be given access to an item under lock and key for appreciably longer than should be necessary. Under those kinds of circumstances, it’s not surprising that shoppers could get fatigued and discouraged.

The most infuriating fact of this specific matter is that since employees’ wages are 100% tax deductible for any given business, if Walgreens simply paid its workers better, they’d care more about the job and provide better customer service. Subsequently, the shoppers, feeling validated, would come more frequently and in larger numbers and spend more money. Trader Joe’s is well aware of this phenomenon, and this is why they aren’t closing any stores as far as I have heard. Also, you ever noticed how quickly the checkout line at Trader Joe’s moves, no matter how many people are queuing? Yeah, me too. And surprise, surprise – the ACSI has consistently given Trader Joe’s ratings in the middle 80s; a B grade, and about five or six points above the national industry average of 79.

A very empty Walgreens. Photo by James Conrad

Suffice it to say, Walgreens’ legal problems regarding wage theft were entirely preventable.

Walgreens’ greed has manifested itself in other ways. In May 2023, Walgreens agreed to pay the City of San Francisco $230 million after evidence showed that the company overprescribed opioids without due diligence, exacerbating and dynamically profiting from the problem of rampant drug addiction in San Francisco.

And then on 13 September 2024, the United States Department of Justice reported that Walgreens agreed to pay $106.8 million for billing government health care programs – subsidized by taxpayers, to be sure – for undispensed prescriptions.

While Walgreens has had to deal with market forces beyond its control, it’s safe to say the company has become its own worst enemy through its own blind criminal avarice.