What’s Next for Walgreens' Leadership Amid CEO Departure?

The departure of CEO Rosalind Brewer, the high-profile executive who shepherded the business during the height of COVID-19 vaccinations, has left Walgreens Boots Alliance (WBA) looking for new ways to capture growth. The company announced her exit on Sept. 1, noting that the board of directors and Brewer “mutually agreed” on the decision for her to step down.

Ginger Graham, WBA’s lead independent director, has taken on the role of interim CEO. She first joined the board in 2010 and has brought extensive industry experience to her directorship.  Among other positions during her career, Graham was president and CEO of Amylin Pharmaceuticals and group chair of the office of the president at cardio medical technology firm Guidant Corp. She earned her MBA from Harvard University, where she was later a faculty member.

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“Ginger is the ideal person to serve as interim CEO, given her leadership experience across multiple segments of the health care industry, deep knowledge of WBA and strong operational skills,” said Stefano Pessina, executive chair of the WBA board.

During Brewer’s two-plus years at Walgreens, she led the organization through a nearly unprecedented vaccination effort, which ultimately delivered more than 70 million shots. She also guided the company’s expansion in health care services. Before WBA, Brewer was COO at Starbucks and a chief executive at Sam’s Club.

This is the second c-suite shakeup within a matter of weeks. In late July, EVP and CFO James Kehoe departed the company to pursue a different role in the technology sector, and WBA announced that it was looking to fill his job with a seasoned health care executive.

Pessina reiterated that emphasis on health care leadership for the now-open CEO position. “Our board and leadership team will intensify our focus on creating value for our customers and our shareholders while we advance the search for a successor with deep health care experience to lead in today’s dynamic environment,” he remarked.

His comments underline the company’s ambition in the health care arena, following its 2021 investment in VillageMD and recent acquisition of CareCentrix. In its latest financial report released in June, WBA shared that its health care segment's third quarter sales topped $2 billion, a $1.4 million increase over the previous year’s third quarter. Still, the outlay for health care is sizable, and WBA’s $113 million adjusted EBITDA loss in the third quarter was attributed in part to the VillageMD expansion and lower CityMD visit volume.

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There are some other layers to the company’s performance and recent leadership changes, noted retail analyst Burt Flickinger III, managing partner at New York City-based Strategic Resource Group. During an exclusive interview with Progressive Grocer, he noted that while WBA is pursuing health care, its U.S. customers are mindful of pricing on everyday items, including groceries. “While the health care helps, it’s a tremendous investment in both working capital and capital expenditure, whereas CVS has worked closely with its vendors to become the substitute community food store as well as a drug store,” he pointed out, adding that Walgreens has been “uncompetitive” on pricing during a period of high inflation and is simultaneously grappling with theft-related shrink.

Flickinger also commented on Brewer’s exit. “Roz did everything she could to take corrective action and turn that around. As talented and capable as she is, she became a casualty of the store wars,” he observed.

The search for a new CEO is underway, and Brewer has agreed to assist in the process.

“I am grateful to have had the opportunity to lead Walgreens Boots Alliance and to work alongside such talented and dedicated colleagues. I am proud of what we accomplished together. We’ve improved the lives of our employees, expanded health care services for our customers and enhanced our ability to deliver on our purpose of ‘more joyful lives through better health,” Brewer said.

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 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.