In a bid to drive sales and attract price-conscious shoppers, Walgreens announced on Wednesday a series of price cuts and promotional campaigns set to roll out throughout the summer.
The company plans to reduce prices on over 1,300 national and store-brand products, as well as reintroduce its exclusive myW Days promotions for loyalty program members in mid-July.
The move comes as Walgreens struggles with a challenging retail environment, with consumers shifting their discretionary spending away from the drug channel in search of better value.
According to Manmohan Mahajan, Walgreens’ Global Chief Financial Officer, the company’s retail stores open for at least a year experienced a 4.3% decline in sales during the second quarter.
To bolster profits, Walgreens is following in the footsteps of retail giants like Walmart and Target, as well as grocers such as Aldi and Amazon Fresh.
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These companies have recently announced their own promotional campaigns to attract shoppers in the face of persistently high inflation, which, despite falling from its peak of 9.1% in June 2022, remains 19.4% higher than January 2021 levels.
Walmart U.S. CEO John Furner revealed that the company has nearly 7,000 “rollbacks,” or temporary price reductions, in place.
Walgreens is lowering costs of more than 1,300 everyday items in the hopes of winning back cash-strapped customers. @rebeccajarvis has more. pic.twitter.com/Rie55bWfcC
— Good Morning America (@GMA) May 30, 2024
Similarly, Target announced price cuts on 5,000 popular products, with executives acknowledging that one in three Americans are maxing out their credit cards due to financial strain.
Aldi, a discount grocer, recently announced $100 million in savings by reducing prices on more than 250 items through Labor Day.
Meanwhile, Amazon Fresh is offering U.S. customers a 30% discount on 4,000 weekly rotating grocery items every day.
However, industry analysts caution that these price cuts do not necessarily signal an improvement in the inflation crisis.
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Noah Rohr, a consumer equity analyst at Morningstar Research Services, argues that the reductions “are more indicative of the competitive landscape than inflation.” He suggests that retailers are primarily focused on capturing and retaining customers during a challenging economic period, with the goal of building long-term customer relationships.
