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Drug store drama
Walgreens CEO Roz Brewer is stepping down. The stock is tanking. The news isn't much better for rivals CVS or Rite Aid either.
It’s been a great year on Wall Street. (August’s stock market swoon notwithstanding.) But America’s big three pharmacy chains need a prescription to help cure their financial woes.
Shares of Walgreens, a Dow component, are down more than 35% in 2023. The latest bad news? CEO Roz Brewer, who joined the company in early 2021 from Starbucks (following a previous stint as a top exec at Walmart), announced she is stepping down.
Walgreens has struggled since Brewer took the helm. But the company’s concerns may not really be her fault. The two top rivals of Walgreens, CVS and Rite Aid, have both been hit hard. Shares of CVS have tumbled 30% this year while Rite Aid, a penny stock, has lost nearly three quarters of its market value in 2023.
CVS, Walgreens and Rite Aid all face myriad problems. For one, there is steep competition from Walmart as well as an increased push by Amazon to try and dominate the pharmacy biz in the same way it has put the squeeze on so many other specialty areas of retail. Target, which bought a large chunk of CVS pharmacies that run in its stores, is also hurting Walgreens.
But there are other worries. The Covid vaccine and Paxlovid boom appears to be over. The companies have also had to take big charges to settle charges related to opioid prescriptions. Rite Aid is reportedly mulling bankruptcy because of how large the payouts are. It’s not going to get easier for the drugstore giants anytime soon. So whoever winds up getting the job to replace Brewer at Walgreens will face a difficult task.
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