Correction: An earlier version of this story incorrectly characterized the portion of last quarter's loss that was due to goodwill impairment charges.

Walgreens is closing approximately 1,200 stores across the United States as the pharmacy chain struggles with slumping consumer spending.

The closures will occur within the next three years, starting with 500 stores being shuttered in fiscal year 2025, Walgreens announced Tuesday in an earnings report. The company had confirmed plans in June to USA TODAY to close unprofitable stores but had not disclosed how many locations would be affected.

The move is part of a multi-year cost-cutting program under CEO Tim Wentworth, who took on the job last year. In a statement, Wentworth reiterated the company's commitment to focusing on improving its core business: retail pharmacy.

"This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term," Wentworth said in the statement.

True Value bankruptcy:Store files for bankruptcy after 75 years, selling to hardware rival Do it Best

Walgreens to close 13% of stores in U.S.

While it's not immediately clear which 1,200 stores Walgreens is planning on closing, the move would impact about 13% of the more than 8,700 stores that were open in the United States as of Aug. 31 last year.

The announcement comes amid an improving – but still challenging – fiscal year 2024.

While Walgreens exceeded its target of slashing $1 billion in costs in the last fiscal year, the chain reported a $3 billion loss last quarter. Still the chain's revenue in the last fiscal year rose more than 6% from the a year ago, according to the company's earnings report.

Fourth-quarter sales in the retail pharmacy sector reached $29.5 billion, an increase of 6.5% from the same quarter a year ago.

Drug store chains struggle with declining sales

News of the impending closures come as Walgreens and other drugstore chains struggle to keep up with competition from Amazon, as well as declining drug reimbursement rates from middlemen for filling prescriptions.

CVS has laid off thousands of corporate and other employees since 2023 while dealing with "continued disruption, regulatory pressures, and evolving customer needs," a spokesman previously told USA TODAY. Since declaring bankruptcy about a year ago, Rite Aid has closed hundreds of stores across the U.S. after struggling for years to keep up with its larger competitors.

But drug stores aren't the only businesses facing declining sales amid rising prices and a downturn in consumer spending.

Just this week, hardware wholsaler True Value became the latest chain to file for bankruptcy since the COVID-19 pandemic, joining  LL Flooring, Red Lobster,Bed Bath & Beyond and Big Lots, which has since shuttered hundreds of stores since it announced its bankruptcy proceedings in July.

A host of others, including Hooters, Walgreens, Sears, Kmart, J.C. Penney, and even Disney Stores, are among those that have shuttered stores across the nation since 2020.

This story has been updated to fix a typo.

Contributing: Gabe Hauari, USA TODAY; Reuters

Eric Lagatta covers breaking and trending news for USA TODAY. Reach him at [email protected]