Brookshire Grocery Sells Its Pharmacies to Walgreens
Regional retailer Brookshire Grocery Co. has revealed an agreement whereby Walgreens will acquire the grocer’s 120 pharmacies in Texas, Louisiana and Arkansas, which includes pharmacy customer prescription files and related pharmacy inventory. The vast majority of these locations are being converted to Walgreens pharmacies that will operate inside of Brookshire Grocery’s stores.
Customers of affected locations will be notified, and prescription files will transfer automatically in the coming weeks to nearby Walgreens or Brookshire Grocery in-store pharmacy locations. Customers will receive notification in the mail along with details about their prescriptions.
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As part of the agreement, a select few pharmacy locations will close. Those patient files will transfer to either another in-store pharmacy at Brookshire Grocery’s or nearby Walgreens retail pharmacy.
“We are excited to take this next step with Walgreens to strengthen our pharmacies and further our commitment to our employee-partners and customers that make up our BGC family,” said Brad Brookshire, chairman and CEO of Brookshire Grocery. “The pharmacy industry has become increasingly complex over the past few years, and it was important to us to find a business leader that has the capabilities to focus on providing exceptional pharmacy services and value to our customers.”
Eligible Brookshire Grocery pharmacy employees affected by acquisition are being offered employment opportunities with Walgreens. The pharmacies in Brookshire Grocery’s Reasor’s stores in Oklahoma are not included in this transaction and will remain under Brookshire Grocery brand and ownership.
“Walgreens has a long history of serving communities throughout the U.S., and we look forward to providing BGC’s customers with greater access to a wide range of trusted pharmacy and health care services,” said Brad Ulrich, VP of pharmacy and retail operations for Walgreens. “Our pharmacists are playing a critical role in health care today, and we truly value the importance of the pharmacist-patient relationship. As part of our commitment to ensuring a seamless transition, we’re excited to also be providing employment opportunities for BGC’s existing pharmacy staff.”
The news of the acquisition follows corporate layoffs at Walgreens Boots Alliance and store and distribution center closures.
While its earnings took a hit in third quarter, Walgreens' sales went up by 8.6%, topping $35.4 billion. The overall upturn was fueled by sales growth in the U.S. retail pharmacy and international segments, along with contributions from the health care division in the United States. Excluding tobacco, comparable retail sales rose 0.2%, with strong results in the grocery and household and beauty categories.
Given reined-in consumer spending and changing health care needs among many Americans, Walgreens updated its outlook for the rest of the year. The company revised its EPS to $4.00-$4.05 from the previous estimate of $4.45-$4.65.
“Our revised guidance takes an appropriately cautious forward view in light of consumer spending uncertainty, while still demonstrating clear drivers of a return to operating growth next fiscal year. We are raising our cost savings program target to $4.1 billion and taking immediate actions to optimize profitability for our U.S. Healthcare segment,” CEO Rosalind Brewer explained, adding, “I am confident that our turnaround strategy positions WBA to drive sustainable core growth and deliver long-term shareholder value."
Sidley Austin, LLP acted as lead legal advisor for Walgreens' agreement with Brookshire's, along with Weil, Gotshal & Manges, LLP. The Food Partners served as strategic and financial adviser and Greensfelder, Hemker & Gale, P.C. and Kilpatrick Townsend, and Haynes and Boone served as legal counsel to Brookshire's.
“My grandfather laid the foundation for our core values in 1928 which continue to be supported by our team providing excellent service, showing integrity and doing our best every day. With this next step, we will remain focused on creating and delivering exceptional value to our customers,” added Brookshire.
Tyler, Texas-based Brookshire Grocery currently operates more than 200 store locations in Texas, Louisiana, Arkansas and Oklahoma under the banners of Brookshire's, Super 1 Foods, Spring Market, FRESH by Brookshire's and Reasor’s. The company is No. 63 on the PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Deerfield, Ill.-based Walgreens, which operates nearly 9,000 retail locations across the United States, Puerto Rico and the U.S. Virgin Islands, is No. 5.
