We’re Going Home – Walgreens

The deal for private equity firm Sycamore Partners to buy Walgreens closed on Aug. 28. We know what that means.

Private equity will restructure the company, sell off what parts it can, restructure real estate holdings, close stores, layoff employees, and increase company debt, while making their executives an obscene amount of money. Walgreens bankruptcy seems likely in the near-term future based on what happened with companies like Toys R Us. Sycamore Partners’ deal is leveraged with “more than double the average debt level used by private equity firms to acquire companies last year,” said U.S. Senator Elizabeth Warren in a letter to them. All of this is what private equity does in the United States. It does not contribute one whit to improving the consumer economy. Importantly, some consumers will lose access to pharmacy services when stores close.

On my way to the wholesale club I pass two Walgreens stores, which seems like a lot. I notice neither of them is within walking distance of residential housing. In other words, they depend upon our automobile culture. A person doesn’t go to Walgreens except to get something specific. This kind of shopping faces competition from online retailer Amazon where we can point, search and click to have a product Walgreens may or may not carry delivered to our home within a day or two. Amazon trucks are ubiquitous in our rural neighborhood. We see them more often than we think of going to Walgreens, whether or not we buy from them.

I have a Medicare Part D prescription drug plan and the company that administers it dictates which pharmacies are available to me. I wanted to use the nearest pharmacy to support their small business but they weren’t on the list. I picked the warehouse club because I go there twice a month for groceries anyway and getting my prescription would save a trip. The last time I went inside a Walgreens, it was because they are a UPS drop off point. I have also shopped there to review their large inventory of over the counter medications to find a specific dosage of vitamin B-12. They did not have it, so I got it by mail order from the manufacturer.

When I was a grader we had a locally owned drugstore with a pharmacy a block and a half from our home. In the mid-1960s, whenever I had extra money from my newspaper route, I would go in there to see what they had. Mainly, I looked for reading material (comic books or paperback novels) and candy. I was infatuated by baseball cards sold with a stick of bubble gum. Over the years, the drug store disappeared as automobile culture and larger scale retailers influenced our shopping. During the ten years I lived there, they were a part of the cultural landscape. In part, discounters like Walgreens contributed to their demise.

The only person I knew who depended upon Walgreens was my maternal grandmother who lived in downtown Davenport. There were no grocery stores there — today we would call it a food desert — but Walgreens sold a few grocery items like milk, butter, eggs, bread, and selected canned goods, all of which she bought. Without an automobile, it was a big production for her to visit a supermarket, involving a bus ride or having a relative pick her up and take her there. She got her prescriptions from Walgreens which was within walking distance.

Access to Walgreens is not important to me. I buy all of my bandages, ointments and sundry health items at the pharmacy in our nearby city. We went without a pharmacy for a while, and I’d like to see them be successful. Thing is, I don’t buy $100 of sundry items from them in a year, so Walgreens or no, it has been a struggle for them to survive.

The world we knew continues to change. Some parts of the future are hopeful and some definitely are not. Big Pharma will figure out how to sell us their medicines. As Walgreens begins the slow dance toward going out of business, I accept it as the failure of large retail franchises that can’t compete with Walmart or Amazon. It is a condition of modern society, and retail in particular. I hope they make it yet doubt they will. There are other causes than saving Walgreens that deserve my attention more.